Radio age research, manufacturing, communications, broadcasting, television (1941)

Television Bolsters U.S. Economy Expaudittg Demand of Video Industry for Wide Range of Basic Materials and Component Paris Will Act as Powerful Stimulant to Many Other Industries By John K. West '(• I'icsidcnt in Charge Public Relations, RCA Victor Division of Excerpts from an address by Mr. West before the American Management Association in New York, March 17. DURING the war, our econo- mists fijrured that it would be necessary to hold our national in- come at 208 billion dollars to keep us out of trouble. Last year we hit somewhere between 225 and 250 billion. Now, with some economic factors piving evidence of being spent, we are fortunate in having television as a jack to help hold our economy up—an industry that will be the sturdiest of any since the automobile was invented. Television, America's greatest new industry, is bolstering our economy in many ways. It stimu- lates supplier industries. It is a vast business of itself. And all this is dwarfed by television's ability to move goods. First, let's see how television stimulates other indus- tries. Television, as a market, is still taking shape. 1949 marks only the third full year of its postwar activity. Yet we are quite confident that the industry will produce over 2,000,000 television receivers this year. The annual rate of produc- tion is stepping up so rapidly that, barring unforeseen restrictions, by 195."?, television should hit an an- nual going rate of around 5,000,000 receivers. Television a Boon to Industries This means a great deal to the mines and mills and factories in our country. It means a vigorous, grow- ing market for industries as far apart as New England textile mills weaving intricate cabinet grille cloths and Southwestern silver mines whose product is used for television tuner contacts. A television receiver has about 1100 components. That's ten times a.s many parts as the ordinary radio. Television absorbs the prod- ucts of hundreds of component manufacturers and sub-assembly manufacturers directly and those of thousands of suppliers indirectly. This means business for business all over the country. The receiver and the antenna on the roof take around 40 pounds of steel. Multiply that by 5,000,000 units a year, and you find television using 200,000 tons of steel, per year. There are so many little pieces of copper wire connecting parts in a television receiver that, if they were all put together, they'd make a single piece over 100 feet long. All told, each receiver requires about 9V2 pounds of copper. At the 5,000,000 going rate television will soon reach, television's annual cop- per requirements will hit 47'-! mil- lion pounds! Add 40 million pounds of aluminum and the 8.T million pounds of glass which will be used in picture tubes alone and the pro- portions of this industrial giant be- gin to be seen. In cabinets, tele- vision will use enough wood every year to make an inch-thick dance floor of four square miles!* There's a pound of rubber in each set. There are plastics, ceramics, mica, carbon, nickel, tungsten and paper. All of the.se figures are only the slightest indication of the real eco- nomic effect of television's material Over 103,000,000 board feet. requirements. This raw material must be fabricated into billions of component parts before it becomes a part of your home entertainment. We mentioned previously that over 2,000,000 television receivers are forecast for this year. Let ua translate that to dollars. At the retail level, these 2.000,000 tele- vision receivers add up to around $650,000,000 worth* of business. There will be appro.\imately $25,- 000,000 spent on television by ad- vertisers this year. Some 40 new stations will go on the air during 1949 to bring the total past 90. Each of these new stations repre- sents an investment approximating a quarter-million dollars. A.T.&T. is expanding television networks this year to link thirteen more cities to the present fourteen on the East- Midwest lines and is increasing the number of circuits joining the most important television cities. Billion Dollar Industry in 1949 Add it all up and we see that television, in 1949, only its third full year, should account for busi- ness activity totaling over a billion dollars! Imagine how big this baby will be when it really grows up! Industry, as well as agriculture, has always been involved with the cycle of planting seed, working to assist growth, and then harvesting the results. Television has grown so rapidly that it's easy to see this cycle in it. There was investment needed—investment in men, labo- ratories, intricate equipment; in- vestment in dollars, energy, genius and time. RCA alone spent $50.- 000,000 on television in research, experimentation, development and facilities. Its harvest is the phe- nomenon of commercial television. It is as an advertising medium that television's impact on market- ing methods has been most felt and recognized. We learn how. in three weeks, two $35 spot announcements weekly resulted in 2,270 New York outlets taking on a new food prod- uct. We hear about Macy's at Christmas time offering a $9.95 doll, fashioned after the little NBC marionette, "Howdy Doody" — sell- ing 10.000. We see the "Texaco Star Theatre" getting the incredible sponsor identification of 95','2 per- cent! We find Donald Stewart, ad- [18 RADIO AGE]