Television digest with electronic reports (Jan-Dec 1954)

4 same time they produced new fringe areas, creating need for new community systems. Unless economics of station operation change, very few really small-town TV stations will be added in the foreseeable future. Most of the stations now being built will not bring service to brand new areas. Same goes for applications pending, when they're finally granted and stations are built. FCC recently submitted figures during Senate hearing (Vol. 10:21), showing prospects for station growth. There are 257 communities with stations now; 89 more cities have CPs (78 vhf, 116 uhf), but many of these won't be built. Furthermore, among the 223 applications pending, only 25 additional cities are represented. Vast majority of pending applications are tied up in hearings for vhf in major cities. Boosters and/or satellites, toward which FCC now appears favorably disposed (Vol. 10:23), could pose serious threat to community operators. Their economics remain to be explored, however, and it's possible that community systems would offer more than can be offered economically through the repeaters. Community systems aren't necessarily hurt by presence of several free signals. For example. Port Jervis, N.Y. is reported to get 3 satisfactory free signals, yet a 7-channel system is being installed there and customers are reportedly signing up at a good clip. Another case is Harrisburg, Pa. , where system was operating before stations got going. When 2 stations began, antenna operator offered to provide subscribers with their signals for $18 connection fee, and many accepted. Prospect of nev; stations is often more harmful to systems than their existence. There are many instances where customers held off, waiting for stations to be built, then hooked on to system for the extra signals it offered. ONE-FOURTH OF TV REVENUE FROM SUNDRIES: That $600,000,000 figure we gave you last week as our prediction of 1954 TV time sales, projected from FCC's report showing 1953 total network-&-station revenues of $430,800,000 (Vol. 10:30), should have been designated as prospective revenue from all sources — not from time sales alone. We erred in our interpretation; instead of stating that $600,000,000 would be the time sales this year, we should have made clear the figure represents total revenues. It will come as a surprise to most people, in and out of the industry, that more than one-fourth of TV's revenues derive from the sale of services other than time. There is no breakdown as yet of 1953's $430,800,000 because the FCC report was preliminary — hurried along for the Senate uhf hearing. However, breakdowns for the preceding 4 years are available from FCC, and they show: NETWORK & STATION GROSS INCOME Total Broadcast Net Revenues Incidental Revenue From Time Sales* Revenues 1952 $324,200,000 $236,500,000 $87,700,000 1951 235,700,000 175,300,000 60,400,000 1950 105,900,000 76,300,000 29,600,000 1949 34,300,000 23,400,000 10,900,000 * Amounts actually accruing to networks & stations after commissions, rebates, etc. Thus between one-fourth and one-third of TV's revenues derive from sundries such as program, talent, production and other so-called "incidentals." This surprising ratio, say the FCC experts, is peculiar to TV. In radio, for example, it's only around 10%; in 1952, last year for which FCC radio figures are available, incidentals represented approximately $48,000,000 out of radio's gross revenues of $469,700,000. Our guesstimate of $600,000,000 as the minimum 1954 take by TV stations and networks combined still stands, however — for the same reasons stated last week. So does figure of $800,000,000 or more representing gross 1954 expenditures by advertisers on the TV medium as a whole. This includes not only cost of time, but the amount of money remaining with advertising agencies, program producers, talent sources, etc. — in a word, that which doesn't find its way into the TV operators' tills. For 1953, total advertisers' expenditures on TV were $688,700,000, according to the calculation by McCann-Erickson for Printers' Ink (TV Factbook No. 18, p. 370).