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The Empire of the Air: The Broadcasting Lineup

THE EMPIRE OF THE A/R THE BROADCASTING LINEWhat is the radio combine's | broadcasting structure? Why does it the broadcasting field? dominate, of the 611 licensed | broadcasting stations in the United States does it own? The Radio Corporation of America neither owns nor leases many stations. Instead of tying up millions in such holdings, it has spun its network of chain stations which floods the air with "sponsored" or "sustaining" programs approved by its subsidiary, the National Broadcasting Company. This company acts as advertising solicitor for the associated stations. Its president is Merlin Hall Aylesworth, formerly chief press agent for the interests. The sponsored programs, which take up the lion's share of radio time, are paid for by Industries with something to sell. While the National Broadcasting Company operated at a. loss in its fledgling period, it is now so emphatically a going concern that in 1930 its revenues amounted to $22,000,- 000. At the beginning of 1931 there were 74 American stations linked in the National Broadcasting Company's system. Why are the remaining 537 stations so overshadowed? Possession of cleared chinnels is the answer. Paul Hutchinson, who has minutely analyzed the situation, states: "A study of the 40 channels cleared by the radio commission shows that on 28 of them are stations on the NBC chain! On 13 there are stations affiliated with the Columbia Broadcasting system. Only two cleared channels are not occupied by chain stations!" These chain stations, moreover, are greatly favored by the radio commission in the matter of power. "In the case of the NBC stations it is found that the average grant of power to stations is more than 5000 watts in excess of what the president of that company has testified is needed to produce regular reception at dependable distances! These stations, in words, practically blanket the country with programs which originate in the studios of this sub sidiary of RCA." Mr. Hutchinson queries Just how much of a. competitor the Columbia system is of the National Broadcasting Company. They are rivals, of course, in the struggle to secure advertising programs, but he foresees the possibility that they may yet come under a single control. He points out that Columbia is half owned by Paramount-Famous-Lasky; that the Radio Corporation owns Radio-Keith-Orpheum, Radie Pictures, Film Booking Offices and the Pantages theaters; and that all of these motion picture groups are included in the Will Hays organization of the Moving Picture Producers and Distributors of America. "It is frequently rumored within the industry that this alliance traces back to a common banking domination. If this is true, the ultimate control of CBS and NBC is likely to be, it not identical, closely allied." Meanwhile air channels in the broadcasting band have mounted extraordianrily in value. Theoreticthe air channels belong to the public. Commerce has no rights to them. Yet, through its legal department, the National Broadcasting Company is seeking to entrench itself behind the problem of priority use. This claim is set forth in pamphlet No. 12 of the series of "Little Books on Broadcasting." The writer, Mr. A. L. Ashby, lugging in "analogous cases" from the utilities states: "Although it may well be that a station has no property right in any particular channel as against the regulatory powers of the United States, I am of the opinion that the station has some right--the right of a prior user. This right of a prior user cannot be taken away by a subsequent user or a new applicant, provided the prior user continues to serve public convenience, Interest or necessity." On the basis of this legal opinion the National Broadcasting Company paid $1,000,000 to the Insull Inter-| ests of Chicago for a broadcasting station in that olty. This price, many times the value of the station, was clearly paid for the air channel. The Insull people had signed a waiver to any vested Interest and their license ran for merely three months. The broadcasting company bought that station and channel in the belief that what had, they could bold, and that they could collect from the public sufficient money to make the investment profitable. (Copyright, 1932, Ventura Free Press) (The next Instalment of "The Empire of the Air" will appear in the Stockton Record next Wednesday).
Article from 25 Apr 1932The Record(Stockton, CA)
CLIPPED BY
nathanobral

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