Broadcasting Telecasting (Oct-Dec 1957)

MANUFACTURING RCA SALES $1.1 BILLION, UP 5% • But, Gen. Sarnoff says, profits 'slightly below1 1956 • Board chairman cites RCA, NBC strides forward in 1957 RCA's business volume in 1957 passed the billion dollar mark for the third straight year, gaining 5% over 1956 and reaching an estimated total of $1,180,000,000, Brig. Gen. David Sarnoff, board chairman, reported last week. In a year-end statement, he said profits in the first nine months were up somewhat this year but that "the softening of general economic conditions in the fourth quarter and the highly comGEN. sarnoff petitive situation in the radio-tv industry now indicate that profits for the full year will be slightly below 1956. " Net profits in 1956 came to $80,074,000 before federal income tax and $40,031,000 after, on a gross of $1,127,774,000 [Manufacturing, March 4, 1957]. The expected drop in 1957 profits (of which no estimate was made) will compare with a 15.7% decline in 1956. Gen. Sarnoff looked for an increase in total volume of business in the electronics industry in 1958. He said RCA dividends to stockholders in 1957 totaled $23,917,000 (preferred $3,153,000, common $20,764,000), equaling $1.50 per common share on the approximately 14 million common shares outstanding. RCA investment in capital improvements during 1957, he said, came to $35 million. The company employs 80,000 people, 7,000 of them overseas. Gen. Sarnoff said NBC, a service of RCA, "moved forward on all fronts during 1957, capturing a larger share of the viewing and listening audience and increasing its business volume over 1956." Among other NBC developments he cited plans for the use of magnetic tape television in both color and black-and-white; production of live programs expressly for educational stations; new programming for the 1957-58 season including more than 100 "specials," and a 67% increase in color programming. He said "significant improvement" in both transmission and reception had brought color quality "to a point where the color picture received in the home now exceeds the expectation of even color's strongest advocates." Color set sales "have not as yet attained the desired volume," he said, but "there is encouraging evidence throughout the country that a mass-market status for color tv is close at hand." Gen. Sarnoff said that among RCA's major accomplishments in 1957 were these: "1. The first fully automatic system to launch and guide missiles to their targets was turned over to the Armed Forces and tested successfully. "2. The first commercial method of re cording and transmitting color television programs by means of magnetic tape was demonstrated publicly, and orders for this new system have been accepted for delivery in 1958. "3. An experimental electronic highway system was devised by scientists of RCA Labs in cooperation with the State of Nebraska to increase driving safety. This may lead eventually to full automatic control of highway traffic. "4. A new method was devised to transmit facsimile by 'bouncing' high-frequency radio signals from ionized air particles created by the passage of meteors through the upper atmosphere. An experimental system was used to transmit still images nearly 1,000 miles without relays. "5. A new ultramagnifier which quadruples the enlarging power of RCA's electron microscope was developed and will be put into commercial production in 1958. It increases direct magnification from 50,000 to 200,000 times and photo-enlargement capabilities from 300,000 to more than 1 million times." In electronic research he called attention to a number of "outstanding advances" by RCA scientists. Among them: the "Thyristor high-speed switching transistor for electronic computers and automatic controls; new compounds that "promise to push back the 'heat barrier' that now limits performance of transistors and diodes at high temperatures"; a high-speed printing system now under development for recording the output of electronic data-processing systems, capable of translating coded information into letters and figures and printing at speeds of about 100,000 words per minute; a thin-screen amplifier for brightening x-ray images by 100 times for direct viewing in certain medical uses, and the "Model C Stellarator" which RCA and Allis-Chalmers are building for use by Princeton U., on behalf of the Atomic Energy Commission, in exploring ways to harness the H-bomb's fusion process for peaceful purposes. NO PLACE TO FIFTH PLACE Looking to the future, Gen. Sarnoff noted that in the last 25 years the electronics industry has grown from "virtually no place to fifth place" among American industries and predicted its total volume 10 years from now will be double its $12 billion total in 1957. He named these as "four broad fields in which the industry will expand most rapidly: "1. Color television — The practical experience we have gained in our pioneering efforts with color television to date has confirmed our belief that the future growth of television as a profitable business depends on color. As we see it, this applies not only to the manufacturing and sales end . . . but also to the programming and sponsored advertising of tv broadcasting. "2. Automatic systems — Versatile elec tronic systems, applied in the fields of data processing and computing, communication, and automatic control, are becoming increasingly important in defense as we advance into the age of missiles and space exploration. They are also essential to the operation of our complex industrial processes. "3. Electronic components — ■ Electron tubes, electronically-active materials, solidstate components, and transistors will be in growing demand as electronic applications expand. These components are the basic building blocks of home entertainment and appliances, broadcasting and communications, and navigation and guidance systems. "4. Nuclear research and atomic power — Electronics supplies instruments and equipment essential to nuclear research and development, as well as the instrumentation and controls needed in applying atomic power to industrial and private use." Gen. Sarnoff said that "with earth satellites and missiles now realities, electronics and the technology of space propulsion form the keystone of our defense structure. The electronics industry therefore faces a vastly expanded role and a new and dramatic challenge. The American electronics industry is equipped and ready to meet this challenge." He continued: "We believe that today, America leads the world in electronic research and engineering— in new materials, components and systems. America also holds the No. 1 position in the production of electronic goods for industry — computers, controls, communications and automated devices. "The task before us now is to retain our leadership in electronics and certain other fields of technology, and to regain leadership in those fields where the advantage may have been temporarily lost. "As in other critical periods in recent history, the RCA — a leader in the electronics industry — is prepared with both scientific talent and production facilities to contribute substantially to our national security." Reviewing 1957 activities, Gen. Sarnoff said RCA "continued to lead in black-andwhite television sales" and that "RCA Victor's leadership" in the hi-fi field was "strengthened." RCA Victor, he continued, "again . . . won the largest share of national record sales and increased its business markedly over 1956," while "all of RCA's tape recording for home use went stereophonic." Radio set sales "advanced substantially," he reported. In electronics for industry and science, Gen. Sarnoff noted that "a new RCA industrial electronic products organization was set up to bring new ideas and services into the most rapidly expanding and potentially significant area of electronics"; that the first major installation of RCA's electronic dataprocessing system was demonstrated by the Army in Detroit, and that other RCA systems were bought by two life insurance companies; that "significant strides" were made in closed-circuit tv systems, with the "most extensive compatible color installation for medical use" being demonstrated by the Army and a similar system being purchased by the U. of Michigan Medical School; that installation of the first state Page 60 • December 30, 1957 Broadcasting