NAB reports (Mar-Dec 1933)

of the networks are extremely active today in soliciting those accounts that are now on the air spot and trying to bring them over to network, and in the case of new prospects, keep¬ ing them away from spot. They are the big competition that spot broadcasting has to meet today. Up to a few months ago, I will say about last summer this time, through a gradual increase in individual station rates, the spread between the cost of using a network schedule and a spot schedule, if it included basic territory, where the dif¬ ferential of rates is greater than elsewhere, had gotten up to about 25 per cent. In other words, we had to sell a man that he had to pay spot stations 25 per cent more than he paid the network for those same stations, and that isn’t an easy argument or hasn’t been an easy argument in depression times. Nevertheless, we have made progress. Since February we have developed — we didn’t start then but it might have started in the latter part of last year — five new spot broadcasting plans, some of them, two or three of them on tests of two or three stations. But if those tests are successful, it will lead to a considerable volume of business. Yet if we hadn’t done creative work for those clients, building up work, we wouldn’t have gotten them on spot broadcasting. Their agencies wouldn’t have done it, witli one or two exceptions where the agency does cooperate. We find this, the moderate sized agency that can’t afford to operate a special radio department consisting of anywhere from ten to twenty people, as some of the very large ones do, the moderate sized agency and the small agency welcome the kind of service we and one or two others offer. We act in effect as their radio department, counsel with them and help them and go over their plans with them and slowly but surely we get somewhere. The thing it seems to us is important for you to decide at the present time is whether you want to do a constructive job of building spot broadcasting for the benefit of the whole field of all stations, or do you want to scramble for the going business and let the effort to build up flop. That is about the net of it. (Applause) MB. FON : Mr. Craig has given me a very good sugges¬ tion which I think I would like to discuss, and that is the advisability of forming within the National Association of Broadcasters an organization similar to one which newspapers have. I forget what it is called, but the object of the group is to promote the sale of newspaper advertising in the case of newspapers. Why wouldn’t it be a fine thing for the Na¬ tional Association of Broadcasters to have a division, the object of which would be to promote radio advertising or advertising by radio? CHAIRMAN CARPENTER: Mr. Fox, see if this would be getting at that very problem, see what you think of this. Here is a resolution by Mr. Travers. RESOLVED, That a committee of five be appointed by the Chairman of the Commercial Section to study station rela¬ tions with advertising agencies and special representatives and report with definite recommendations to the annual convention of the Association in October. We have no particular group working on that specific problem. MR. FOX : I think it is something which should be done. I don’t think the sales job of selling the idea of advertising by radio lies; with any group outside of the N. A. B., nor do I think that this organization as an organization can promote the sale of anything except advertising by radio. What is meant is this: We have a number of stations who are owned by the networks, the networks themselves are members of the N. A. B., but I think if we do promote the sale of advertising by radio, we have done something. Now as to spot or network, that is purely a sales problem that my representative has, and when it comes down to the final getting of the order for my station, it certainly is a job that my representative has. CHAIRMAN CARPENTER: On this particular resolution by Mr. Travers, is there a second? The resolution was seconded by Mr. Martin Campbell. MR. HARLOW : The only suggestion I have is five is a little bit unwieldy number. I think you can accomplish the same purpose with three much quicker. CHAIRMAN CARPENTER: Is three satisfactory? MR. TRAVERS: Yes, that is satisfactory. CHAIRMAN CARPENTER: Is it satisfactory to the sec¬ onder ? MR. CAMPBELL: Yes. CHAIRMAN CARPENTER: We will change it to three. Are there any other comments? MR. PATT : Mr. Chairman, I don’t want to get myself out on the limb nor throw this meeting into any turmoil or any¬ thing of that sort. I merely want to express dispassionately a feeling that has cropped up in one or two of the reports we have heard read today. I think Arthur Church referred to it as the rather unsatisfactory relationship between stations and networks. It seems to me that the National Association of Broad¬ casters constantly have two elements, one which is fostered by the national coast-to-coast networks and the other, spot broad¬ casting. In most eases, in a great many cases, our stations have an interest in the development of both. Those of us who depend upon spot broadcasting for our income have a real interest in development of network broadcasting because we realize that we offer fine network programs which Columbia and the National Broadcasting Company have given us, and we wouldn’t find it possible to sell our facilities to as many clients or for as much money without them. I don’t know what the answer is, but I do know that there is a great tendency on the part of advertising agencies to express ex¬ treme dissatisfaction over the relationship as it exists between either of the networks and any one or all of the affiliated stations, that dissatisfaction arising in one ease from the placing by that agency of a network account where a local account blocks the way or in another case of the agency want¬ ing dear time from 7:30 to 7:45 across the board or some other equally desirable hour and finding that the network has been able to sell its time at eight o’clock on Monday night and at 7:45 on Tuesday night and 7:30 on Wednesday and 9:15 on Thursday and 10:00 to 11:00 on Friday, thus mak¬ ing it practically impossible for a good spot advertiser to find the desirable time that he wants. Mr. Craig briefly alluded to the problems his organization is up against and similar organizations, and have been for a number of years, in the fact that they have a 25 per cent penalty which they must assess on the same national ad¬ vertiser for the use of individual station facilities as opposed to network broadcasts. I don’t know how the networks can be brought into line, you might say, in making their rates jibe with the local station rates. Perhaps that isn’t possible, but I would like to see a committee appointed which would very seriously go into this matter, and that committee to con¬ sist of a representative of each of the two networks and two stations affiliated with the tvco networks and perhaps one or two organizations in the business of selling spot broadcasting. I know I have heard in a good many circles outside of the borders at all conventions about this, and the thing has been coming up for three or four years. But every year we talk about it in secret sessions and never get anywhere with it. Something must be done and the sooner we do it, just that much quicker are we simplifying the business of broadcasting and getting more business, not only for spot broadcasting but for the networks, too. I am going to suggest that such a committee be appointed. CHAIRMAN CARPENTER: I believe that particular thing must be considered by this committee under this reso¬ lution here. I don’t see how they can get away from it. It is all bound up together. MR. PATT: Then I suggest the two networks have a voice in the committee, that is, representatives of the two networks and the committee be made a committee of five. MR. TRAVERS: Mr. Chairman, I think that you are probably a little out on that limb, John, as you suggested. I look upon the networks as being something with which we are all associated with definite contracts. We carry out those contracts when we deliver our facilities to their national ac¬ count. There is plenty of untouched radio business. Both networks have sales organizations and promotion divisions that can spend more money than perhaps our volume or our net as individual stations. . Page 156 .