Variety (Jan 1936)

tTednesdayt Janaary^ 8^ 19>36 VARIETY 31 WB WAIVES TAX Warner ros. had at press time, yesterday (Tuesday) received signatured contracts from 167 stations, while 84 others had signified their intention of obtaining licenses from thla source. Among thei WB licensees are such clear channel stations as WLW; Cincinnati;' WTIC, Hartford; WHO, DesMoles; WFAA, Dallas; WG^, Chicago; WSM,. Nashville; WXS, Chicago; KNX, Los Angeles; KSL, Salt Lake City, and KFAB, Lincoln. Other major stations that have taken contracts from Warner are WBEI, Boston; WCKTJ Cincinnati; WAIU, Columbus; KMBC, Kansas City; WHK, Cleveland; .WOW, Omaha; WKT, Oklahoma City; WTMJ, Milwaukee; WMC, Memphis; WWJ, Detroit; WXTZ-WOOD, DetroitGrand Rapids, dmalia; KWK, St. Louis. Other regional that has come in the Warner fold is the Yankee Network, while the Scrlpp^-Hpwai-d 'group has covered itself through agreements for WNOX, Knoxville, and W'CPO, Cincinnati. Under' the licenses which WB is issuing stations are required to pay a jnonth in advance, and inake weekly reports of the music used. Outlets operating at half time and also those charging less than $26 a quarter hour are charged half the standard monthly rate, which is four times the highest quarter-hour listed by the nation in Standard Rate and Data. Licenses taken out by local stations apply only to Warner music , which 4s broadcast on local, regional or national spot programs and that for national network purposes an entirely different license is required. It is W;arner's intention to make contracts for the latter, directly •virlth NBC arid Columbia and predicate the rate of payment on the rate actually, charged for the stations in a hookup. What action the Ainerican Society of Composers, Authors and Publishers will take against the stations which ha Ve, failed to obtain a license from that source is to be determined at a speclial meeting of the ASCAF board' of directors tomorrow (Thursday). Few stations have secured new ASCAP five-year , agreements, since the .Society at. the behest oif NBC and CBS agreed to let all present licensees to go on using its music with the understanding that this permission, could be revoked on two days' notice. Vliew taken by .a major segment of the Indle broadcasters is that they will not tie up with the Society unless both the old sustaining fees and the 6% ta.x on commercials Is substantially reduced to account for the JIfEerence they must pay to Warner Bros. Nohnetwork stations aver that they are prepared to confine themselves to Warner music, while the indie 8ta,tions with web afHHatlons and which have Warner contracts take the position thiat it is up to the networks to flght their battle with ASCAP, since the national links have everything to lose if their associated, outlets are shut off from .the use of ASCAP music. Explains to 4 A't I^ermari Starr, Warner v.p. in charge of the performing rights matter, '''Went over the heads of the networks last week in explaining the. position of bis company to advertisers and ad agencies. Among the meetings he held in that direction was one with John Benson and Frederic Gamble, I'l^frrez .and executive secretary, respectively, of the American Association of Advertising Agencies. NBC and Columbia made demands oh Starr Monday (6) that he assist them in trying to avoid infringement on Warner copyrights by supplying themi with a complete list of the WB copyrights. James W. Baldwin, executive secretaiT of the National Association of Broadcaster's, who was empow'ered to act for indie members in. making performing rights contracts, turned over to Starr Dec. 30 a list of 225 stations which had agreed to take a Warner' license. Up to yesterday (Tuesday) Starr held not received approved contracts and the necessary advance payment from some 3Q outlets on Baldwin's' original list. LENOX R. LOHR MEETS F CC. Washington, Jan. 7. No time was lost in acquainting Lenox R. Lohr, new prexy of National Broadcasting Co., with bigshots Jn the Washington arena. Ink on announcements of Lohr's appointment was hardly dry before new N. B. C. boss blew into town under chaperonage of David Sarnpff, R.C.A. head. Lohr was Inr troduced to government radio czars at informal luncheon attended by Commissioners Prall, Sykes, and Case of the Communications Commission broadcast division. Freeman Case Delayed Suit brought In Federal court by Cecil, Warwick & Cecil against tJharles Henry Freeman, Jr., citing the latter for contempt of an injunction out against him In connection with the Sherwln-Willlams NBC program has again been p6stponed. Hearings were ^et for Jan. 3, but. have now -been moved up two week WMCA Hikes Rates tatlon WMCA, New Tork city, has revamped its advertising card rates. Readjustment, effective Feb. 1. Represents an approximate 20% increase over prevailing scale. Extends to spot announcements and day time coats also. Present hour rate of $450 goes up to ?550, half hour periods from $250 'to $300, quarter hours from $150 to $185, and five minute stretches from $00 to $75. Visiting New York Frank Fenton, WBNS, Columbus. Leo FItzpatrIck, WJR, Detroit. Harry Sedgwick, CFRB, Toronto. Harry Butcher, CBS, Washington. J. T. Ward, WLAC, Nashville. H. K. Carpenter, WHK, Cleveland. Ray Bright, KTRH, Houston. Naylor Rogers, KNX, Los Angeles. W. T. Knight, WTOC, Savannah. Jos. Barndy, CPLC, Prescott, Ont. Shave F.C.C. Budget Washington, Jan. 7. President Roosevelt asked Congress to give the F. C. C. only $1,475,000 for operating expenses next yesr, shaving $50,000 off the amount appropriated for this year. Budget Bureau opined that this slice will not result In' curtailment of any Commlsh activities. WCAO's Extra Dividend Baltimore, Jan. 7. WCAO. which Is outlet here for CBS, last week declared an extra dividend of $1 per share for the year '35, Station paid regular dividends of 30c per shai'e per quarter of the year, ringing total to $2.20 per share for tlie past annum; Stock In WGAO was last mbhth bringing about $g8 per share in some recent trnnsactions. < Bob Roberts at KTA San Francisco; Jan. 7. M. E. 'Bob' Roberts has been named to tlie post of sales and advertising ma.niager of Hear."}t Radio KYA and assumes his new duties today f2d). Another Roberts, Lee S., preceded him by only a. few days as new program chief of station. mm] E.T. Music Publicfaers* Protective Association Huddles to Ponder Warner Tactical Move—Mechanical Fees Unpopular with Advertising Agencies and Smaller Stations NO MASTER FEE Rated as the miost Important move that has developed, to date from the performing rights tangle la the waiving of the electrical transcriiption fees in every form by Warner Bros. It Is now unnecessary for a transcription manufacturer to pay a master fee or an advertiser to pay a commercial tax oh Warner copyrights, as long as the records are played on stations holding 'WB performing licenses. Waiver also applies to library service discs which are used for commercial purposes. Serious iniport of this WB gesture to the rest of the music industry" was reflected in a hurried meeting which was held at the Music Publishers Protective Association last Friday (3). John G. Paine, MPPA chalntaan, who serves as trustee for the industry In general in general In licensing copyrighted music for radio discs, had called together a representative group of major publishers to discuss the implication of Warner's waiver and to decide what they wanted to do about It. Unanimous decision of the group was thai Paine was to go on licensing their copyrights under the terms they agreed to last' November, namely, that all licenses for transcriptions be for a period ending June 30, 1936, that the master fee for unrestricted tunes be $5 and restricted tunes, |10, and the individual publisher reserves the right to charge more than the customary 25c per unrestricted composition and 50c per restricted composition when the music is part of a commercial program. MPPA Perturbed What particularly perturbed the MPPA was the . announcement by several of the indie disc library services that they proposed to take advantage of Warner's waiver of the manufacturing tax by picking the vast majority of their tunes from the WB catalogs. One of thej^ Associated Music Put>liBher9, Inc., adr vised Paine that it figured to cull 75% of its recorded repertoire from among Warner copyrights. Position that has been, taken by Warner Bros, is that the performing right should be sold along with the mechanclal right, or visa versa, and that until this arrangement can be 'Investigate Discrimiiiation Crosley Wires Atty^Genl: Move May Revive Govt, Suit Has Not Been , propped Washington, Jan. 7; Strong denial that government's anti-trust suit against American Society of. Composers, Authors, and Publishers has been put on the skids pame Icist week frona the Justice Department. Federal ofllclals declared 'the case: definitely has not been dropped.' INSULL NAMED INGYGtWEB Chicago, Jan. t. iSamuel Insull's name is mentioned In connection with a promotional proposition being developed by Ota Gygl, fornier vaudeville violinist and prompter of thia Amalgamated "(Ed Wynn) network in the east in 1932. Gygi is seeking to line up from 16 to 20 small wattage stations in the three states adjacent to Chicago. Last year Gygl tried to promote a similar network with WCFL, Labor station, as the pivot. made a general 1)ractlce Warner is prepared to waive Its right to a hianUfacturlng fee so long as the user has obtained a performing llcensie. ASCAP allies regard the Warner waiver as an astute tactical maneuver to gain the good will of the small station operator, whose interests are affected 'most_ by the mechanicl fees. Elimination of the latter will not only make it easier on the national advertiser who uses transcriptions but relieve the small broadcasters of the necessity of paying 25c op 50c per tune everj' time he ties up his library service with a commercial program. Payment of the 25c and 50c fee hats long been a sore point with ad agencies that handle considerable tran.scrlptlon business. American Association of Advertising Agencies put In; a strenuous protest against the fee with the MPPA about two years ago and asked that the latter organ Izatloh agree to Join in a test suit on the issue. Four A's held that the copyright law had not intended that the copyright owner collect both a performing rights fee and a manufacturing tax from what amounts to practically the same source. The test suit proposition was turned down by the MPPA. Hennan Starr Answers Networks Denies Oblifi^ation to Furnish List— Paley Tabled Buy-In on WB Last June Herman Starr, Warner Bros., v.p., yesterday (Tuesday) charged that NBC and Columbia were each trying to work otit separate agreements for WB music when the webs signatured new five-year deals with the American Society of Composers, Authors and Publishers on June 4, 1935. Starr's charges were contained in letters answering the networkis' demand fpr complete lists of Warner cbpyTightis and also threat t"hat they would hold Warner liable for any damages that accrued from Infringement suits. Networks, said Starr's letters to each, knew long before June 4 that Warner was withdrawing from the Society, and rather than carry through jnrith the discussions they were having with Warner in this connection they elected to sign with 'extraordinary unexpectedness' and aiacrlty/'.on the eye of the opening of the government's suit' agSlnst the Society a renewal agreement with the latter. Starr In his letter also held that .since he wasn't doing business with the networks he was under no obligation td furnish them with any information about Warner copyrights. ' Should CBS In particular bring court action againnt Warner the latter proposes to Include in the defense » testimony showing that prior to June 4 Columbia's prez. William S. Paley, dlijcussed with Harry Warner the proposition of buying a half interest In the WB IJuWlBhlng group. Wire which Powel Crosley, Jr, prez of WLW, Cincinnati, sent U. S, Attorney General Homer . S. Cummlngs New Tear's Eve has both th» networks and the mtislc ind.ustry'a lawyers, worried. Counsel connected with the g;overnment'8 anti-trust suit against the American Society of Composers, Authors and Publishers and the Music Publishers Pro^ tectlve openly ex^ pressed themselves last week as Ih' clined to the belief that Crosley's appeal would result In a revival of the litigation. Until the adyeht of the Croslejr telegram the legalities in music's camp were prepared to regard th« case as a dead issue, and transfeir the papers to the inactive flle. The Indle broadcasters, these lawyers now say, have Injected a new twist to the controversy by asking thi government to find out whether ASCAP made discriminate deal* with the networks and certain types of stations, the latter obviously ro> ferrlhg to thosie operated by newsa papers. Music's lawyers had ez' pected, after the government had notified theiin that the case woulA be postponed without date, that th* matter would slip into a statei of quiescence and stay there until a year or two hence, when the do* feridants would move for a dlsmls>. sal of the complaint.. Crosley, these defense lawyers bsUeve, has through his telegram projected for government consldera* tlon an angle that might. If istrong enough pressure emanates ' from members of Congress,, bring th« Federal Trade Commission liito the situation. This angle Is government regulation of the sale of performing rights. In his wire Crosley averred that some form of federal regular tlon Is necessary that the rights of the general public and Independent broadcasters may be properly pro* tected. rotley's Telegram Crosley's telegram to Attorney General Cumniings follows: 'Variett in Its Dec. 26 issue ln« dicates likelihood that the goverament will abandon current antl-tr'ust suit against the American Society of Composers, Authors and Publishers as indicated by dropping of the. case from the calendar in the New York Fedei'al Court due to the inability of the government's attorneys to obtain mutually acceptable stipulations from the Society. 'Late developments Including Warner Bros' withdrawal from th© Society seem to indicate the necessity of even greater diligence upon the part of the government in this action in order that. Independent broadcasting stations shall not have already exorbitant fees doubled up on them^ The whole setup of levying fees is inequitable, grossly unfair, and definitely requires some form of government regulation In order that the rights of the general public and independent bi-oadcasters may be properly safeguarded and protected. "The principle Of charging royalty fees whether copyright material is used or not Is particularly Inequitable. 'Jta^ I respectfully suggest that complete Invcstlgatlpn be made regarding existing special, agreements, If any, between copyright hpldern and broadcasting networks and other types of broadcaste-rs. Before entering into 'or agreeing Upon any .stipulations wltii any copyrlfirlit groiip It would seem only fair that the National Association of Broadcasters, representing most of the Independent broadcasting statipi^s and all. other broadcasting stations concerned, should be aware of and perhaps liave a voice In the establishment of such stipulations.'