Cut-Rate Radio

Columbia Broadcasting System has earned a reputation for beating its competitors to the punch in snagging top talent. Last week CBS was first on another score. Beginning July 1, CBS will cut its radio advertising rates by 10% to 15% for time sold after 1 p.m. Affecting 195 stations across the nation, it was the first rate cut in radio network history. The reason, CBS President Frank Stanton explained, was that television has cut CBS's evening radio audience by 10% since last year, and advertisers have been on "a buyer's strike" against radio. Said he: "We have gotten only one legitimate piece of new radio business since July 1950."

At the news, other radiomen whipped out their audience charts to see what they should do. Said American Broadcasting Co.: "We shall meet the competition." National Broadcasting Co., which tried to cut its own radio rates last winter but was howled down by its affiliated stations, was "studying" the move. But with the latest Nielsen report showing that CBS has nine of the top ten evening radio shows, radiomen guessed that NBC would also cut.

Stanton was able to make the radio rate cut because CBS-TV, long a dependent of the radio division, is finally earning its own way; it has been in the black since January. Last year, CBS's TV revenue equaled only 18% of its radio gross. This year, Stanton expects it to hit 50%.

TV setmakers were not feeling as cheery as Frank Stanton. Because of the continued slump in sales, layoffs and production cuts were announced last week by Radio Corp. of America, Philco Corp., Allen B. Du Mont Laboratories, Inc., Emerson Radio & Phonograph Co., and Westinghouse Electric Corp. Admiral Corp. announced that unless sales pick up soon, it will have to borrow money to carry its big inventories.

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