Variety (Jul 1939)

Wednesday, July 26, 1939 RADIO VARIETY 3S Local Advertisers Viewpoint Chicago, July 25. (The following explanaloTV matter was originally contained in a letter gent last week to Rav Jones, executive secretary oj the Chicago chapter of the American Federation of Radio Artists, after t?i« latter toifhdreu) from negotiations with a committee of advertisers and broadcasters. The issue separating managemeht and employees is payment of special fees in addition to staff salaries for local radio onnouncers. The economics of local radio ore sketched heretoith as part of the plea that the added btirden ttould throttle locol rodio. The Chicoffo situation is being closelv uiatched in broadcasting generallu becouse it is seen as a model for AFRA procedure and labor costs'in other local situations.) By R. I. SCOTT Schwimmer & Scott Agency, Chicago, 111. To fully appreciate the prob- lems that are presented to the broadcasters and agencies handling the majority of local radio, we must recognize the difference between a national radio advertiser and a local radio advertiser. ♦ • • Even the largest of local adver- tisers, such as Marshall Fields, at best, can Uke advantage ot less than 50% of the audience reached by a major station. As another example, let us take a local merchant operating an estab- lishment on 63rd street: The best he can hope for by using a major sta- tion in Chicago, is to reach the peo- ple living within a five-mile radius of his store—because 90% of his total business comes from that area, even though that area contains only 15% of the total audience reached by that major station. * • ♦ Another very important factor that enters into the limited results that a local advertiser can obtain from radio, is the fact that the chains have the preference of the better times on the air. Since the total talent cost of the local advertiser's program, is charged to the one market, the re- sult is that the local advertiser pays more for talent per city, and pays for time that in. most instances is less desirable. ♦ » • In the case of the local advertiser, he has almo.<!t a day-to-day check, aTid there is no mystery about whether advertising is profitable to him or not. * * * Local Advertisers Go Along on Short Figuring Local advertisers seldom work on a set appropriation. In nearly every case, these advertisers work on their ability to pay. The local advertiser supports his first radio efforts from the business that he is doing as a result of his location, or through his other sources of contacting the pub- lic. Usually this enables him to use only a limited amount of radio ad- vertising. Generally the local ad- vertiser-starts in by using spot an- nouncements on minor stations at the least expensive time. Then, by a slow process of education, concentra- tion, and careful handling and plan- ning of his sales message, with spe- cial offers from time to time, this ad- vertiser is stepped up to a 15 min- ute program using recordings on a little better station. As I said-before, the broadcasters have realized this situation, and have within the past two years, made every effort to correct this situation wherever possible in view of their increased overheads, and. we believe that some progre.ss has been made along these lines. But to turn around BOW, and further increase the cost ot local radio, you might just as well kiss local radio goodbye This is not a matter of mere theory. U is entirely a matter of the advertiser's actual ability to pay, and what he can reasonably expect to get from his. dollar invested in local radio. Cost of all talent has been such in Chicago that only the large.H local radio advertisers could build the type of programs that would ienable thfm to compete with network tal ent Therefore, not only because the networks take the best time but because of high cost of talent to .' cover one market, the local advertiS' M very often finds his costs are so great that his advertising is not profitable. V ive Talent Essential To Meet Web Opposition Live talent shows arc not only desirable to a local advertiser, but often necessary to enable him to compete with the other programs On the air at the same time. It Would be unwise from the stand point of all concerned to raise the cost of such programs and thereby shut the door on this type of local programming. The network advertiser .spreads his expenditure for talent over all the stations on the network, whereas charge his entire expenditure, for talent against the one market in which he is operating. As a comparison between the costs charged against the Chicago market for two shows ot the same type, one network and one local, let's use the following comparison: Professor Quiz broadcast over 34 stations^approxlmate estimate tal- ent cost including prize money, etc., $1,000 per week. The Salerno Questionnaire broad- cast over WMAQ, approximate esti- mated talent cost, including prize money, etc.—$300 per week. Based on the above figures, on the Professor Quiz Show, the advertiser charged $87.00 against Chicago mar- ket, whereas the entire $300 of the Salerno Questionnaire was charged against the Chicago market. The sponsor ot Professor Quiz took complete advantage ot the total cir- culation coverage of WMAQ, where- as, because ot Chicago distribution only, Salerno could take advantage only ot the Chicago portion—or less than one-halt ot the total circulation coverage ot WMAQ. ? This will again point out the mis- take of making radio so expensive that the local advertiser cannot af- ford to use radio at all. Let me point out some of the un- fairness ot the demands as made in the recently proposed AFRA code: In Chicago, on one of the Class B stations, there is a program known as the 'Night Watch' which runs from midnight until 4 a. m. The time cost tor'this program is $400 per week. According to the schedule of rates AFRA has set up for an. nouhcers, the announcer cost alone on this program would be $448 per week. Obviously, a ridiculous sit uation. Let's take another example: the racing program on one of Chicago's Class B stations. This lis a four-hour program with eight different spon sors, This entire program is pur- chased as bulk time thereby en- abling these advertisers to coopera- tively sponsor this entire four hours, giving each one a lower rate than any one would have to pay if he purchased a half hour individually. The cost for the two announcers that are used on this program would be $768 per week under the pro-, posed AFRA code. Obviously, this is also ridiculous. Even ono-tenth of this amount would be a prohibitive cost to add to the burden of these advertisers. And gentlemen, if you do not believe it, just check with any of them and find with what great difficulty these sales were made to those co-sponsors. ' Take the example of fifteen min- utes on WMAQ six times per week prior to 9 a. m. The time cost is. $306 per week and under the pro- posed AFRA Code the announcer's cost would be $96 per week, an in- crease of more than 30%.' On a Class B station, five days a week, using two announcers, the time cost is $180, and according to the rates set ,.up by- AFRA the an- nouncer cost would be $40. More, than a 22% increase. This time is now being used by a local credit clothier who can only pay a maximum of $11 per customer, and even at the present cost, the program has been just barely profit- able and there is a question in his mind whether he should cancel ra- dio ' and forget about it, and go to newspapers. Even at this time he is testing newspaper copy with the thought in mind that if his cost per customer is less, he will turn to newspapers and drop radio. Is this the decision that you are attempting to force on local advertisers? On a certain ininor station we are offering for sale the period from 10:30 to 11:30 p. m. six days per week, using two announcers, with a time cost ot $225, and according to the scale as set up by AFRA, the announcer's cost would be $192— nearly 100% increase. We believe the foregoing facts are sufficient to warrant our taking the attitude that to establish a fee for staff annoimcers, regardless of the size of the fee, would, over a rea sonable period of time, kill more than 50% of all local radio. KYW UP FOR HEARING BEFORE LABOR BOARD Philadelphia, July 25. Federal mediator has been named by the National Labor Relations Board to sift charges brought by the American Communications Associa- tion and the United Electrical and Radio Workers against Westing, house-owned stations and the West- inghouse factory. ACA iand XJERW claim that the company 'refuses to bargain collectively in the true spirit of the Wagner act.' ACA charges pertain specifically to KYW here. At repeated meetings, West- inghouse refused to give the union a signed contract and wants to make agreements for only one month at a time, which the ACA declares is too short a time. Mediator named will hold hear- ings to get all the facts on both sides, which will be preseiited to the NLRB for a decisloa AFRA's Local Pay Viewpoint Chicago, July 25. (In anstver to the letter written b^^ adman R. J. Scott (see adjoining columns) the viewpoint of the actors' union is set forth in the /oltouiing statement from the executiue secretary lor Chicago. lUmay be noted, as st0ni/icant, that the union frankly regards as 'hokum' tne claim that the added expetue tutll cripple the'local radio industry..) By RATHONS A, JONES Executive Secretary for Chicago, Aiiierican Federation o/ Radio Artists Talent in the radio industry formed a union for the same reason that em- ployees in other industries formied unions, in order to eliminate prac- tices regarding pay, hours of work, working conditions, etc., which they regard as inadequate and unfair. In memorandum submitted to the AFRA Negotiating Committee, the Broadcasters' and Agencies' Com- mittee stated their reasons why they considered AFRA wrong In practic- ally all of its demands. After care- fully considering that memo AFRA believes that its authors did not state the facts for the most part and did not give any adequate consideration to the problems faced by talent in Chicago. We hold 'that opinion for the following reasons: In the memo the Broadcasters and Agencies requested, on the basis of what they said were the facts, that AFRA lower fees for actors, announ- cers, and singers in Chicago rather than attempt to raise them. AFRA was not formed for any such pur- pose. In a survey made before the Network Commercial code was signed, AFRA found that over 75% of the members of AFRA in Chicago made an annual wage of less than $2,000 a year. That condition existed to a great extent because there had never been a Union until AFRA was formed two years ago, through which the talent in radio could protect it- self from the. constant lowering of fees. That condition has been sub stantiaily improved by the benefits- increases in pay, etc., secured by AFRA for its members through the signing of the Network Commercial Code and other contracts, but it still exists as far as local commercial broadcasting is concerned. The em- ployers, although they were In an industry that was constantly advanc- ing and breaking records every year with increased advertising, took ad' vantage of the unemployment condi- tions throughout the country, the constant influx of new talent coming out ot schools and colleges unable to get jobs in other industries, and the general decline of available jobs in the theatre, vaudeville and moving picture industries. All Union negotiating committees are subjected to the continual and invariable objection ot the employers when increases in pay are requested, that the 'industry can't stand it.' Therefore, such statements in them- Authors Union Glowers at Actors Union; Both Sides Silently Prepare to Fight Radio actors and writers organiza- tions, which have been alternately growling and handshaking tor nearly a year on the question of jurisdiction over scripters, are tightening for a showdown siege. American Federa- tion ot Radio Artists, the performer imion, is going ahead with its or- ganizing of air authors, while the Radio Writers Guild, the scripters' group, is apparently digging in for an extended battle over the issue. An unusual phase of the situation, however, is that neither outfit will discuss its attitude or plans. The warfare, if that's what it's to be, ap- parently won't be merely a barrage of accusations and handouts. RWG, which has been coming to a boil over the matter for some time, has finally carried the issue to its parent or- ganization, the Authors League of America. Latter's councir meets to- day (Wednesday), with the air scripting jurisdiction " one of the prime items on the agenda. Just what action will be taken for planned), is a mystery, but a highly significant clue as to the temper of the organization is the reluctance of the members to discuss the matter, A possible step might be a ruling barring from future member.<ihip in the Authors League all writers join- ing AFRA rather than RWG. While that would presumably have little ef- fect on air authors at the moment, it might be a grave matter for them In League, wiin a closed shop in legit and gradually nearing similar holds in films and. the book and maga- zine fields, would thereby handicap AFRA-member writers. Such a move by the League, considered a remote possibility only a few months ago, is now figured likely and, in fact, imminent Adaptatten Mgbt Another maneuver, which League members have long mulled but never, attempted to use, would be to forbid any but League-member writers to adapt their works. That expedient, which has been considered chiefly in connection with the screen end ot authorship, might be extended to radio, though it would be less' etr fective in the latter field, where adaptations of successful books and stories are less commonly used. Particular spark that set off the newest dispute between AFRA and RWG is the contract obtained by the performer ■ union from KMOX, the CBS outlet in St..Louis. Not only does the pact cover staff continuity and news writers, but it also includes free-lancers. It is the latter point that . set the RWG hair on end. AF!rA claims the St. Louis writers have expres.sed a preference for the performer union. As they explain it, 'We were able to get them substan- tial wage rai-ses. which the Guild doesn't have the bargaining strength to obtain. They asked us to rcpre- he local advertiser naturally must the future. That i.s because Ihf .'.cntlhem-how.couldwercfu.se?' It is indicated that AFRA will continue to negotiate contract.^ covering writ- ers whenever and wherever circum- stances warrant. Regarding AFRA claims that. St Louis writers expressed a preference for the performer union, RWG mem- bers assert that there is no piroo£j>l such statements and that the AFRA claim is the same one that's always used Jby one union in invading an- other's jurisdiction. The Guild at- titude is that AFRA is clearly going beyond its constitution in signing writers who are not 'artists' within the meaning of its charter. It's also claimed that AFRA, which has no experience or facilities for handling authorship problems, cannot satis- factorily represent the air scripters. One thing apjpears certain, how- ever. The dispute which began in Los Angeles, where there are pre- sumably numerous non-performer writers, is now almost certain to ex- tend to eve'ry town, where an an- nouncer scribbles out his 'Howdy, Folks' on the back of an envelope before going on the air. What either AFRA or RWG can do for writers in the smaller cHien is a queistion. Certainly the cost of representing the comparatively few writers involved would be much greater than they could pay in dues. Actually, there- fore, the whole matter comes down selves have ceased to mean anything. The Broadcasters' and Agencies' Committee stated that they were willing to negotiate minimum rates for 'special' announcers.. They stated that it was AFRA's principle of pay- ing staff announcers tor all services on local coinmercial shows independ- ently of their staff salaries, to which they objected. They were unwilling that staff announcers be paid any fee in addition to their staff salaries for service on local commercial shows unless the sponsor insisted on select- ing his special announcer for the show and was unwilling to use th> staff man offered by the broadcasting station. When an announcer reads com- mercial copy on a commercial show, AFRA feels that he Is working for the sponsor, or the advertising agency, and that he should be paid accordingly. The duties rendered by a staff announcer on sustaining shows is a service rendered to the broadcasting company and should be paid accordingly. If the Broad- casters' and Agencies' Committee object only to AFRA's principle, but are willing as they stated to ne- gotiate pay increases for an- nouncers, why did they write a memo wherein they attempted to show AFRA that the industry could not stand any increased cost Three Basic Appeals Of Membership in Union The announcers In radio joined AFRA for three principal reasons: (1) . Becatise of inedaquate pay, both for staff and free-lance an- nouncers. (2) . Unfair distribution of the work arhong staff announcers. (3) .-The unfair ..competition into which the staff and free-lance an- nouncers are forced because the employers played one against the other. No consideration was given to any of these matters by the Broadcasters* and Agencies' Committee's memo. The memo further states that the advertiser, who has a small amount ot money to spend, will not be able to use radio unless he can get an an. liouncer tor the program without additional cost AFRA Is not aware that the station rates or that the percentage which the agencies take are any lower for the small adver- tiser than they are for the large. . From the advertiser's point of view, the real problenfi is the total cost ot the program. Including the talent cost If both the method sug- gested by AFRA—of paying staff announcers for their work on all commercial shows, independently of their .staff salaries—and.Uie method suggested by the Broadcasters and Agencies—of paying for their com- mercial work by increasing their staff salaries to include it—re- sulted in the staff announcers get- ting the same compensation for the same service, the ultimate result to the advertiser would be the same and he would not benefit by the use ot one method rather than the other. The real purpose of the sug- gestion is to enable the broadcaster to get more service from the' an- nouncer for less compensation and in addition to make a profit on it through the time charge to the ad- vertiser. Trere is no reason why the bur- den of not increasing the adver- tisers' cost should be placed entire- ly upon the shoulders of. the talent. If the present cost of radio adver- . tising in Chicago is all that the traffic will bear. In spite of the fact that talent is under paid, then the adjustment needed is to make a dif- ferent division (fairer to the talent) of the available income from local radio advertising among the talent, the agencies, and the broadcasters. Their memo paints a very dire and'morbid picture of the radio in- dustry in Chicago. AFRA cannot believe that the Broadcasters and Agencies really feel that we are on a sinking .ship, such as their memo .suggests. Wc have spent two year.s carefully, diligently, honestly, and to a question ot 'principle'—which sincerely learning the tacts means that it will ultimately cost gard to radio broadcasting, bo'.h na many times what the issue is worth.' tionally and locally.