Variety (Jan 1940)

RADIO Thlrtyfourlh VARIETY Anrnvarsary Wednesday, January 3, 1940 That Persistent NBC Problem-The Blue Web-Finally Solved Duri ng 1939 By Ben Bodec Be(oie business volume for the blue network took a sharp turn up- d Ihis past fall NBC and its blue ..Hales often .used the word 'child. To NBC llie blue was a problem child To the affiliates the treat- ment they received was of step- child chornctcr. the war alTil list. The other tack involved a re- modeling of its sales policy. Sales- men began to admit that the red had an edge over the blue to the degree that it had many stations in important markels. But the blue, they pointed out, was a still more economical buy. As time wenl on it became pr.ic- ... „ tically impossible for the blue to de- Pioblom child or stepchild, ine ^average west of Omaha. An- blue as a chronic headache has been ^^j^^^. ^^^.^ ^.^^^^^ ,,,^,e ^^,35 without equal in the h'story ot com- ,^j-,kA, Pittsburgh, which as a West- mercial broadcasting until ]ust ine , j„g,,o„5g operation made it tough for day before yesterday. The resist-, ^j^^ network to clear time. By the ance of network underwriters is now I jj^^^g NBC had overcome this trumbliiK' under attack and the out-1 ^jj^j.^^i^ ^ai^jpg ^vcr the stations look is 'cheery. From August^ w, ^^^^..^jj^^^ , niid-Deccu\ber 10 accounts themselves with the blue. With but three exceptions the.se saine ac- ouuls hiid for years confined their operations to the '^d neUvork o> Columbia. But what the blue net- work had 10 go through before the breaks came makes one of the mo e interesting and curious chapK^'-^. the development of. Ap^^''^^" ' ^'t,', No problem within NBC has caused more heartbreak and sense of frustration than that of putting the blue network on a solid revenue footin-,'. Nothing wilhio Ihat organ- ization has caused so many shifts ill policy and personnel. Nothing within the industry ilselt has served so nuich as a political football. Favored Red The harrying that the blue used a< not confined lo the out ,,. J ■ operation ana oy the time it, got its " ' second set of supplementarie.s set up it was too late. CBS had stepped in and. by concentrating its attack on the apertures in the blue and other inherent wcaki)essc.<;. liad grabbed the business. Columbia had mean- while been vigorously on the move, weaning away some of the big watt- ers from the NBC camp ana building up its supplementary groups. An- other telling factor that the blue had to meet when it finally got rounded oiit ^vas the prevalence of highpow- o.r.ed show.^ on both Columbia and the red. It was no easy psychologi- cal complex to hurdle NBC realized lhat \inless the blue were transcontinental in its. own right it could not justify big talent expenditures for blue programs which had to compete with similarly budgeted shows on Ihc red and CBS. TED FIO-MTO Composer-Conductor TrlpU'-lhr^-iit ■ Mae.stro of Hadio, Sliii;!' and Hcioen fume, nflor sue cossCiil years along the West Coast, acclaimed Ambassador of llhythm of the C.oldon West and llolly\vpi)d Kilin Colony's fuvorilo band lp.-»(lor, shifts riistward, i-urrenllv appear iUK ill ('onKros.'f Hotel. ChloaKO, en roiito for stay cm I'roadwu.^'. BIG REVENUE IN 1939 BUT RADIO OVERHEAD BITES DEEP to take wa< not conimea lo me uui-1 side That NBC salesmen were | By 19S6 the blues hookup was cx- proiie to lake the line ot least re sistaiice and switch the conversation tended to the westcoast. In 1937 the blue's invasion of the south took place, with Birmingham, Memphis, Atlanta, New Orleans each having a blue release. The same year similar arrangements were made in Minne- apolis and Montreal, while in 1938 the blue got its own set of outlets in Texas. The drive to improve facil- ities on the blue has al.so included a new antenna lor WJZ, New York, a new frequency and transmitter lo cation for KECA, Los Angeles, and the complete re-equipping ot KDKA and the moving of that station's out- let closer to Pittsburgh. Accis. Not Pioneers Even after the rounding out and filling had taken place the blue found that it had still a tougher nut to crack. Advertisers shied away from pioneering in the u.se of these new groups of supplementaries, and since, as the network itself put it. commercials beget commercials, the blue inaugurated (Oct. 21, 1933) the blue di.scount plan, which allowed added discounts as high as 20% for those accounts using the blue south- ern, southwestern, mountain and Pa- cific Coast groups. From time to time NBC has un- dertaken to solve the blue sales sit to the red network whenever a pros- pect started asking probing ques- tions about the blue was known to insiders. The querulous pressure from blue affiliates, who kept de- manding that the network begin fill- ing some ot those wide open spaces with commercial programs, was jnisery-provoking. But the ribbing which hurt most came from a fac- tion on NBC's board of directors, highly activated by a Wall Street banker, v;hich frequently contended that NBC would be best off i( it re- posed all its eggs in one basket, the red. and urged that the blue ought to be disposed of to ary one with a reasonable offer. Attempt.s to promote an . under- writing syndicate for the blue be- came frequent events, with one of the.se attemptees l>eing Richard C. Patterson, Jr., the former NBC ex- ecutive v.p. Always a stout op- ponent of the proposed schism was David Sarnoff. He argued that to retain its No. 1 position in'the field of broadcasting NBC must retain both links and that with due patience and enterprise the blue could be put on a strong commer- cial foundation. There -was a time that the blue could match its list of important commercial programs with that of the red. And that was back in the early '30s when it (the blue) had such leaders as Amos 'n' Andy, Jack Benny, the Collier's Hour and the Maxwell Houise Coffee program. The fed really started to forge ahead of the blue as to program dominance shortly after Texaco in late 1932 de- [ eriy financed, the proposed Coast-to buted Ed Wynn. With the latter a I Coast network. Transcontinental rapid click the red became the Broadcasting System, went on the of a separate salesmanager for the blue dates back to 1927. This move didn't work out because Bill Ensign, now CBS assistant sales manager, quit shortly afterwards and nothing was done to replace him. The red and the blue continued to operate under a single sales setup until about two years ago when A. E. Nelson was brought' in from KDKA to func- tion as sales manager for the blue. (Nelson has since been shifted to San Francisco, as head of' NBC's local stations management.) During Nel- son's stay there were attempts m.ide j lo bolster the blue's program fare by inducting a few name acts, for instance. Doc Rockwell, but the only thing that really cut a swath of listeners attention and newsprint space was the recruiting ot Arturo Toscanini as the blue's No. 1 attrac- tion. It was. a coup of coups for radio. The most drastic executive move to hypo action lor the blue occurred last summer when Keith Higglns was taken out of station relations and named v.p. in charge of blue network operations. He was given his own sales setup, his own sales promotion staff, his own stations relations con-- tacts and publicity man. With Can- ada Dry's 'Information, Please,' Jer- gens' Walter Winchell, Sun Oil's As predicted by every year-end statement, speech, and tea-leaf reading a year ago, 1939 turned out lo be a corker lor the radio industry. Insofar as current estimates are valid, the year wound up about 12%-13% belter than 1938, a tepid year, and respectably belter than 1937, which w.is a darb. In short, so far as the revenue side ot the ledger is concerned, 1939 beat anything the radio industry has yet seen by n mile. That goes for the networks, too. Their 1939 intake will be around $83,000,000 (gross), or about Wo over 1938. That's the biggest increase, in dollars and cenls (not percentages^, Ihc networks have ever registered over any prior year in their history. And these figures, of course, count time sales only, 'fhcy do not include booking commissions, sale if sus- taincrs, or recoveries on communicnliDiis line charges, etc; Counting time sales only (the standard way of flguring), the industry wound up thus: 1939. 1938. Network gross lime sales $83,000,000 $71,728,400 Net Iiidu.s(ry time sitles (esUmaled).. .... 131,500,000 117,379,459 Gross industry «lme sale.i ^esliiiinted).... 165,000,000 143,500,000 Profits, however, may be something else again. Mere broadcasting intake, no matter how big, may be a floppcroo if expenses and miscellaneous items kill off the gain. Between 1937 and 1938, lor instance, the industry drooped something like $3,000,000 in miscellaneous revenue of all sorts (notably in the sale ot talent), and piled on $1,000,000 more in expenses, That made a big dip in profits, although time sales between 1937 and 1938 had been on a fairly even keel. Expenses rose unprecedentcdly in 1939. and profits, therefore, did not keep pace with the increased intake. With all the experimenting iii new technical developments, technical expenses and capital' cxpendilures on equipment surely went up. So did. pay scales, what with the organizing ol all kinds of unions. Furthermore, much ot radio's future depends on how the 1939 revenue was divided between network intake, national spot, and local. It there was a big rise in national spot business (and there probably was a decent, gain in that category), the FCC may be tempted to hand put a batch of new licenses.. Anybody who can remember back to 1927 will know what lhat means—chaos among smaller competitors and new temptations on the part of the FCC to 'help the little fellow.' For an estimate of what 1940 will bring, the reader is referred to mora competent predictions by .specialists in the business field. About 50% ot radio's revenue depends, after a fashion,, on general business conditions. The olher 50% (network business) may be assumed to remain okay, barring a violent economic catastrophe. blue has since added to its roster such accounts as General Foods CAldrich Family and 'Young Dr. Malone'), Pepsodent ('Mr. District Attorney), Groves Bromo Quinine ('Sherlock Holmes'), Ward Bread (Joe Penner), DuPont ('Cavalcade ot America'), Woodbury ('The Parker Family') Palmolive-Colgalc-Pect and Westinghouse. And so at last the hex is broken, the tide turned. WICC TAKES 'WORK' Bridgeport, Jan. 1. WiCC tonight (Tuesday) joins WTIC in faking 'Let's Go to Work," Herbert Hadcl's interviews with job hunlcis sponsored by Fuller Brush Co. Program switches Irom Sunday spol. Since introducing program more than a year ago. Hadel claims mak- ing job contacts lor more than 160 people at pay ranging from $9 a week to $4,000 a year. PAIGE HEADS ALL-YANK SHOW W. J. Purcell, WGY chief engineer, went to Lake Placid to handle NBC Lowell Thomas. Anacin's '£^sy Aces' blue pickups of broadcasts by Lowell nation by executive and personnel I and Alka-Seltzer's 'Barn Dance" ■ al-I Thomas, at the Adirondack resort lor realignments. The first assignment' ready part of the nucleus, the Winter Carnival. Transcontinental Fails To Jell After eight hectic weeks of oi-- . o[ secretary-treasurer of Transcon- around $75,000 which could be added ganizing and attempts to get prop-1 lincntal, was anxious to salvage as | to the little working capital remain' Westinghouse has set Jan. 25 as the debut data for its program on tli« NBC blue. The halt-hour stanza (Thursday, 8 p.m.) will consist ot the Pittsburgh Symphony orchestra, Raymond Paige conducting. Deems Taylor as commentator and a local choir ot 24 voices. There will also ba a guest instrumental soloist se- lected from among the country's bet- ter-known schools of music, with such soloists eventually, brought to- gether lo lorm an orchestra of their own lor a single broadcast. The pro- grams will originate from Pitts- burgh, the sponsor's home town. American music and talent will be stressed on the series. Paige was booked by the Columbia artists bu- reau through the NBC artists bu- reau, this being due to the circum- stances that it was CBS that brought Paige east last year under a long- term managerial contract. chosen medium for a parade of other sponsored comics. 'While Jack Benny had made sound headway on the blue as soon as he went on Gen- shelf last Saturday (30). The- an- nouncement issued by Elliott Roose- velt, as president of the prdject, was that the- starting date ot the net- eral Foods' payroll the account | work had been postponed from Jan. shifted him to the red so that he could be with the other laugh-jnak ers who were pulling major audi ences. Acsravated Plight 1 to Feb. 1. Roosevelt's statement laid the responsibility for the situa .much as he could ot the $100,000 he had put in with the understanding that Roosevelt would augment his original deposit ot $75,000, which latter sum was to go for the first month's payment on telephone lines. What made Transcontinental's im- mediate financial outlook awry wa-s ing in Transcontinental's treasury, Blackett-Sample-Hummert became the last resort in more than one way for the network's debut per schedule, and out of this curious combination of circumstances came Hummert's own decision to call the whole thing off. Roosevelt got his final word from that quarter Friday that its expenses had been figured I on the basis of starting off with 20 ' and the meeting in which he .sought tion at the doors ot the Blackett-i hours ot busines.s. When it came ! to keep the thing from blowing up 1 Sample-Hummert agency whom ho to the eleventh hour' count with ' c.ompletely and at once was kept go-1 accused of repudiating contracts it Blackett-Sample-Hummert it was : ing until 5 a.m. the following morn- As the big-money advertisers' had given him for 15 night-time | found that this agency, the sole ing. swarmed to the red, the plight of' hours of American Home and Sterl-1 source of Transcontinental busine.ss,' B-S-ll Choice Spots the bluq was decidedly aggravated . ing Products business. I could only deliver 15'/4 hours, in-; Roosevelt's statement of Saturday by its failure to provide the re- The .string ot incidents which pre- ■ volving both day and night sched-' said that Transcontinental had had quired supplementary groups for ac-; ceded Roasevelfs announcement are i and even a half hbur.ot this bid-s from other advertisers but had counts that showed an interest in . without precedent in the history of! ^"as doubtful. ] been unable to. provide them with getting on the blue. The broadcast- the broadcasting industry. For lour As the possibility ot getting out- I time because the B-S-H accounts had j int{ organization was equipped with | days he put up a bitter.and desperate'•'•''e money became hopeless Thurs-1 preempted the choice periods. Now but one set ot supplementaries, and j jjattle to get the network going on those facilities had already been ! the scheduled date. Ho participated ^requisitioned by the big advertisers j ir, one conference after another with on the red. That made it difficult i cither bankers or representatives of for blue customers to got their pro-1 Frank Hummert, with .some of the grains anywhere out-sidc ot the basic sessions lasting until 4 a.m. in the area. Another thing which hap- pened about the .same time which didn't help things for the. blue was the switch of WJR, Detroit, to Co- lumbia. That moved proved fatal for many a blue automobile accoilnt. Faced by this combination of cir- cumstances. NBC undertook to solve it by proceeding along two different tacks. One was to build a second set of supplementaries through the process of expansion of its affiliate hope of finding some solution to the money dilemma. Coin Not Forthcomln.f; The banking syndicate that Roose- velt had placed his final coin-lend- ing hopes in were out of the proposi- tion by last Tuesday (2G). Roose- velt had committed himself to put up another $175,000 but he couldn't produce. H. J. Brennan, ot WJAS- KOV, Pitt.sburgh, who held the posl day (28) Roosevelt turned to WMCA; I that the latter accounts were out N. Y.. the network's proposed feed- ] of the way the network believed ing outlet, with a makeshift solution that it would be able to get enough and Donald Flamm. head ot the sta- tion, accepted it. Flamm agreed to make his studio and staff available to Transcontinental at no cost until the network was beginning to show a profit. Under this arrangement Transcontinental would abandon its own offices in the General Electric building and move a skeletonized staff into WMCA's offices or take other business to begin operations Feb. 1. One ot the.se other time seekers was Carters' Little Liver Pills, a Street & Finney account. With the Transcontinental or- ganization on Saturday there wL're murmurs of the Hummert bowout as having political ramifications. They recalled that it was only' last Tues- day that Bill Blackett, Republican whateve)-other-quarters they would ; National Committeeman from Illi- Hnd in the same building. Roose velt was then to ask Hummert to put up a.i an advance on American Home and Sterling Products billings nois, had called in Fred Weber, general manager ot the Mutual Net- work, and given htm a contract lor two quarter hour.s ot Wander Co. ' business. Blackett-Sample-Hummert execs scouted these implications as silly and added that the agency in due time would come forth with Its own explanation of the events that led up to its decision. Blackett-Sample-Hummert issued the loUowing statement late Satur- day afternoon (30): 'The statement ot the Trans- conlinental Broadcasting System which was released today refer- ring lo an alleged repudiation ot commitments on the part of Blackett - Sample - Hummert lor certain hours ot radio time has been called to our attention. Con- tcrenees* between ourselves and representatives of Transcontinental have never passed the ncgotialion stage. During such negotiations Transcontinental has among olher things failed, to submit to Blackolt- .Siimplc-Hummert evidence -ot il-s financial ability to operate a net- work. 'Any prospective agreements be- tween Blackett-Sample-Hummert and Transcontinental have always contemplated the submission ' on the part of Transcontinental of evidence of its financial stability- Such evidence has not been forth- coming and no agreements have been made. We have and will con- tinue to cooperate in every way with the Transcontinental group.