Weekly television digest (Jan-Dec 1960)

20 JANUARY 11, 1960 APPLIANCES VS. AUTOS: “No industry sells price as much as ours and no industry degrades itself more than we do.” Philco Pres. James M. Skinner Jr. gave that message to TV-appliance dealers at last week’s NARDA convention in Chicago. In a comparison of the automobile & TV-appliance industries, he pointed up these similarities & contrasts: The TV-appliance industry has done as good a job as the auto industry in product development, “but we have not sold it as well.” He cited Commerce Dept, figures showing that, while prices of all commodities have risen 20% in the last 10 years, appliances have gone up only about 4% as against a 43% rise in car prices. TV prices have been reduced 43% in the same period, while the product has been vastly improved. “In spite of talk about service problems,” TVs & appliances are at least as reliable as autos. A TV set has “the same magnitude” of component parts as an automobile. “We normally expect to service our automobile 6 or 8 times a year, and, in addition, to buy new tires, spark plugs, brake lining, replace the coolant, the battery, fan belt, etc., at regular intervals — these are expensive service operations. Do we have nearly as much trouble — really — with our TV sets whose tubes wear out with use just as automobile tires, and whose internal mechanism is far more sophisticated than that of our automobile?” The challenge for both TV & appliances is to “increase our share of the consumer’s dollar,” the Philco president told the dealers. Since 1958, the percentage of the consumer’s income spent for food, clothing and similar necessities has dropped from 49% to 39% “and is expected to decline further.” Major appliance expenditures have remained constant at 4% of total consumer spending for goods. And “it should also be noted that the appliance industry is in competition with such items as swimming pools, power mowers, travel, college educations, etc., for the consumer’s discretionary income.” In the past decade the consumer has averaged 8.4% of his total-goods spending on new cars. But the auto industry, said Skinner, “has elected to charge him more per car in succeeding years, rather than to provide the lower costs which our industry has done . . . They have done this, in my opinion, by doing a better selling job as an industry than we have done.” Secret of the auto industry’s constant improvement: selling up. Car manufacturers & dealers, said Skinner, have continually emphasized product rather than price — price-cutting being effected only by larger trade-ins. Conceding that he had no “panacea,” he urged dealers to exploit product advances in TV & appliances rather than price — thereby increasing both the prestige & the profitability of the industry. « It: “Code of ethics” for TV-appliance dealers was proposed by Westinghouse consumer products vp Chris J. Witting addressing a NARDA convention luncheon Jan. 4. He enumerated these “senseless practices” which have injured the industry and “have sent consumers elsewhere with the dollars that should have been spent with us:” (1) The switch and the “spiff” to dealers for switching brands. (2) The manufacturer or distributor-sponsored trip, which uses money which should be applied to advertising or brand-development. (3) Poor TV & appliance service. (4) “Cherry-picking” — the stocking of only top models & specials instead of a full line. (5) Buying of distressed goods. Full Capehart TV Line: One of TV-radio’s oldest names — Capehart — ^was doing business again last week in a Chicago new-line showing. The former Dynamic Electronics-N.Y., which purchased the Capehart business last year (Vol. 15:33; 16:1), showed a high-priced furniture-styled stereo line which included 4 TV combinations. This June, Capehart plans to have a complete TV line, including portables, table models & consoles, in addition to its present combinations — encompassing all price ranges except the very lowest. Capehart also plans to have portable phonos, tape recorders, transistor radios (made by Shriro of Japan) and a complete line of hi-fi components (tuners, amplifiers, changers, speaker systems). The stereo line shown in Chicago consisted of 2 series — the Signature, with cabinets by Tomlinson of High Point, N.C., ranging from $795 to $3,000, and the Panamuse series from $345 to $815. Capehart hopes to franchise 500 dealers nationally during its first year, on an exclusive-territory basis. Franchise agreement has already been signed for N.Y.-N.J. with the MARTA 72-dealer group. All Tomlinson furniture dealers also are entitled to carry all Capehart items. The company has discontinued the Dynamic phono label, but Pres. Jack Winer says his firm’s private-label business in 1959 was 40% ahead of 1958. Capehart’s plant has undergone expansion and is capable of “doing at least twice our present business.” The firm will make its own TV chassis as well as its stereo systems & hi-fi components. * * * Novel hybrid combination — German stereo & radio with U.S. TV — was displayed in Chicago by West German cabinet & TV-radio phono maker Metz. Heading group which is importing the Metz units is David Krechman, TV-radio industry veteran who headed the old TV-producing Jackson Industries Inc. and Trans-Vue Corp. What makes the Metz combinations unique is the fact that they contain U.S.-made RCA TV chassis (Vol. 15:52 pl8). Krechman told us he had initially ordered 5,000 RCA 21-in. chassis, which are installed in the imported stereo sets by RCA technicians at Metz International’s depot in Carlstadt, N.J. The Metz AM-FM-SW-stereo-TV combination lists at $595 (selling price about $500), is priced to dealers at $375. Krechman said he plans to use 23-in RCA chassis in the West German sets as soon as they’re available. Metz also has a stereo line priced from $199 to $699. * * * Another line of U.S.-German hybrids was announced by Majestic International Corp., distributor of Grundig radios & hi fi. Majestic showed 3 Grundig TV-stereo combinations containing German-built TV chassis with U.S.made picture tubes. Two are 23-in. sets; one is 21-in. Majestic has previously marketed German-made TV sets here. Pres. Leonard H. Ashbach predicted 1960 sales of the line would total $25 million, as opposed to the previous record of $15 million. ♦ ♦ * > A German table-model TV was shown in Chicago by Videola-Erie, which merchandises the West German Fonovox and Loewe Opta lines. The Loewe Opta deluxe set, studded with piano-key type pushbutton tone switches & channel selectors, probably won’t be imported because of the high price, company officials said. Videola-Erie had one hybrid combination on display — West German stereoradio unit with U.S. TV chassis built by Tech-Master, an affiliate of Videola-Erie.