THE DEVELOPMENT AND GROWTH OF FM STEREOPHONIC BROADCASTING: A HISTORY Thqsls for the Dog-Pu of M. A. MICHIGAN STATE UNIVERSITY Ronald K. Salak 1965 1H“ ° r) LIBRARY Michlgan State University ._.._ v1. ———-—._ ABSTRACT THE DEVELOPMENT AND GROWTH OF FM STEREOPHONIC BROADCASTING: A HISTORY by Ronald K. Salak This study provides the first detailed historical account of the deve10pment and growth of FM stereophonic broadcasting in the United States. Although the study describes the AM—FM stereophonic broadcasts and experimental FM stereo broadcasts of the 1950's, the majority of the thesis is concerned with events after the Federal Communi- cations Commission approved the Zenith—General Electric system of FM stereophonic transmission on April 19, 1961. This is also a study of broadcasters, advertisers, receiver manufacturers, government officials, and listeners. It re- ports their expectations, opinions, and controversies that continually surround stereophonic broadcasting. The thesis follows a basic chronological pattern in presenting the history of FM stereo. Material for this study has been obtained from a wide variety of sources including trade publications, private correspondence, government agen- cies, and trade associations. The study does not attempt to provide a detailed technical explanation of the Zenith-G.E. Ronald K. Salak FM stereophonic transmission and reception system. It is, instead, designed to acquaint the general student of broad— casting with the background of this newest technique of broadcasting to be used on a commercial basis. FM has always been the 'poor sister' of the broad— casting industry. For a number of reasons, it has never ob- tained the financial success or listener acceptance achieved first by AM radio and later by television. To overcome these problems, FM broadcasters have attempted to capitalize on FM's main technical advantage; the ability to transmit high quality sound. In the late 1950‘s, many FM broadcasters and radio receiver manufacturers became interested in the possibility of broadcasting stereophonic sound via one FM frequency. The earlier method of AM-FM stereophonic broad- casting, while often capturing many listeners, was inef- ficient and expensive. Thus after extensive testing by the electronic industry‘s National Stereophonic Radio Committee and lengthy hearings by the F.C.C., the Zenith-G.E. system of FM stereOphonic broadcasting was selected over a number of other prOposed systems. On June 1, 1961, FM stereophonic broadcasting became a reality with three stations initiating stereophonic broad- casts. Although many broadcasters and receiver manufacturers had predicted a rapid growth for FM stereo, the number of FM stations broadcasting in stereo increased rather slowly. Ronald K. Salak Receiver sales also lagged behind the rosy industry esti- mates made during the spring and summer of 1961. In many areas of the country, an unfortunate 'chicken and the egg‘ situation developed. FM broadcasters were reluctant to spend the money for stereo equipment and records when there were no sets available to receive the broadcasts. At the same time, listeners were reluctant to pay the comparatively higher prices for FM stereo receivers when there were no stations in the area broadcasting in stereo. Even after stereophonic broadcasting had become a commercial reality, some broadcasters and receiver manufacturers continued to be- lieve that there was little advantage in stereophonic broad- casting. Thus a controversy over the merits of FM stereo that had begun in the late 1950's continued well after the Zenith—G.E. system had been approved by the FCC. FM stereo, however, was slowly accepted by broad- casters, advertisers, and listeners. Many FM stations found stereo to be a success factor when used in combination with good programming, active promotion, and aggressive salesman- ship. Some major national advertisers, including General Electric, Chevrolet, and R.C.A. Victor, also became inter— ested in FM stereo; interested at least on a trial basis. Listeners too were interested in FM stereo. The excellent sound reproduction provided by FM stereo attracted hi-fi enthusiasts and housewives alike. Ronald K. Salak Stores with a limited number of stereo receivers in stock were often swamped by customers when the first FM station in the community began broadcasting in stereo. By the fall of 1964, when began, FM stereo had grown to the all FM stations were broadcasting daily program schedules in stereo could count stereo receiver sales the writing of this thesis point where nearly 1/4 of at least part of their and radio manufacturers in the millions. THE DEVELOPMENT AND GROWTH OF FM STEREOPHONIC BROADCASTING: A HISTORY BY Ronald K. Salak A THESIS Submitted to Michigan State University in partial fulfillment of the requirements for the degree of MASTER OF ARTS Department of Television and Radio 1965 Approved Cg’fi.gégw (:,(fifiy T Major/Professor ACKNOWLEDGMENTS The writer hereby expresses his gratitude to the many persons whose cooperation made the completion of this study possible. Special appreciation is expressed to Dr. Gordon Gray for his help and guidance both by mail and in person through— out this study. RKS ii \ I") A, I. I ,ll '- ("I T TABLE OF CONTENTS ACKNOWLEDGMENTS LIST OF TABLES LIST OF ILLUSTRATIONS LIST OF APPENDICES INTRODUCTION Chapter I. THE DEVELOPMENT (1952 — April 19, 1961) II. THE PREPARATIONS (April 19, 1961 - June 1, 1961) Government . . . Electronics Industry Broadcasting III. THE GROWTH (June 1, 1961 - 1964) Government . . . . . Electronics Industry Broadcasting IV. SUMMARY, CONCLUSIONS, AND SUGGESTED RESEARCH . . . . . . . . BIBLIOGRAPHY APPENDIX iii Page ii iv vi 35 36 39 47 56 57 6O 70 100 107 113 LIST OF TABLES Table Page 1. Growth of FM Stereo . . . . . . . . . . . . . 72 2. Stereo Equipment Costs . . . . . . . . . . . . 76 iv Figure LIST OF ILLUSTRATIONS AM—FM Stereo Broadcast Monaural Broadcast Live Concert FM Multiplex Transmitter FM Multiplex Receiver Page 12 13 14 27 28 LIST OF APPENDICES Appendix Page 1. Stereo Commercial COpy . . . . . . . . . . . . 113 vi INTRODUCTION The Problem This is a study of the newest technique of broad— casting to be used by the electronic mass media on a com— mercial basis; FM stereophonic broadcasting. Stereo broad- casting has been a source of controversy since the first experimental broadcasts were conducted in the early 1950's. Broadcasters, engineers, electronics manufacturers, and advertising executives were discussing the merits of FM stereophonic broadcasting long before the Federal Communi— cations Commission gave its final approval to the technique on April 19, 1961. Many people believed that stereo would save the faltering FM broadcast industry. Others saw it as a vast new area of consumer buying at a time when the con— sumption of television receivers was reaching the saturation point. But there were also people who believed FM stereo was little more than a 'gimmick.’ They predicted that FM stereo would be an unnecessary expense for the broadcaster and an unwanted product by the consumer. This study provides the detailed historical account of the development and growth of FM stereo. Although it re— ports the major events in the development of stereophonic broadcasting previous to the FCC decision of April, 1961, this study focuses on the growth of FM stereo following the formal FCC approval. This is also a study of the expec- tations and Opinions held by broadcasters, advertisers, re- ceiver manufacturers, and listeners; a study of the contro— versy that has surrounded stereophonic broadcasting almost from its creation. It reports the opinions and arguments used by both sides and in the concluding chapter, weighs their validity. Organization This thesis follows a basic chronological pattern. Chapter I concentrates on the relevant events before the FCC Report and Order of April 19, 1961. Beginning with WQXR's experimental AM-FM stereo broadcasts in 1952, the main events included in this chapter are the initiation of FM multiplex services, the development of FM stereo systems, the controversy over the merits of the various systems, and the establishment of FM stereo standards by the FCC. Chapter II is a study of the 1 1/2 month period be— tween the FCC Report and Order and the initiation of FM stereophonic broadcasting on June 1, 1961. This chapter focuses on the predictions and preparations for FM stereo broadcasting by the FCC, the electronics industry, and the broadcasters. Although the time span covered in this chapter is relatively short, the activity surrounding FM stereo was_ especially intensive. Chapter III continues the historical account of FM stereo broadcasting; concentrating on the period from June 1, 1961 through the Summer of 1964. The chapter describes the growth of FM stereo and reports the Opinions formed about the value of FM stereo as a broadcast technique. The final chapter draws together the material re— ported in this study and presents the conclusions reached by the author. It also suggests future areas of study for the student interested in the subject of FM stereophonic broadcasting. Limitations The key point in the development of stereophonic broadcasting was April 19, 1961, when the FCC released its Report and Order establishing the technical standards for the FM stereo system. The main period under consideration, then, begins on April 19, 1961, and closes during the summer of 1964, just prior to the writing of this thesis. Examination of the Opinions expressed about FM stereo has been limited to groups which have had a direct interest in the development of FM stereo, including the FCC, broad— casters, electrical equipment manufacturers, advertisers, and the listeners. This study is also limited by the quantity and quality of source material available. Few reliable figures are available in such important areas as FM stereo set production and the advertising revenue of FM stereo stations. In addition, little material has been published by those persons or organizations that have been directly concerned with the development of FM stereo. Sources Material used in this study has been obtained from a wide variety of sources. Descriptive material has been ob- tained from many trade publications including Broadcasting, Printers Ink, and Electrical Merchandising Week. Important facts and figures were furnished by such organizations as the National Association of Broadcasters, the National Associ- ation of FM Broadcasters, the Electronic Industries Associ— ation, the Federal Communications Commission, and the General Electric Company. A complete list of sources can be found in the bibliography that follows Chapter IV of this study. Definitions and Abbreviations This study is written with the assumption that the reader has at least a basic knowledge of the technical as— pects of broadcasting. The technical terms in the following list are defined in relation to this study. Following this list of definitions is a key to the initials of-trade groups and other organizations discussed in this study. Definitions AM (Amplitude Modulation) FM (Frequency Modulation) Multiplexing Stereo A method of broadcasting in which the frequency of the carrier wave remains con- stant while the amplitude (power) varies. The electri- cal signal power of the sound to be transmitted varies the voltage strength or "ampli- tude" of the carrier wave. Static is an amplitude modu- lated wave that can be re- ceived by an AM radio. A method of broadcasting in which the amplitude of the carrier wave remains con- stant while its frequency (wave length) varies. The electrical signal power of the sound to be transmitted varies the frequency of the carrier wave. Because FM receivers cannot accept AM signals, they are rarely affected by static. The electronic technique that permits the simultaneous transmission of two or more signals within a single channel. Multiplex trans- missions, when applied to PM stations, means the trans— mission of facsimile Or other signals in addition to regu- lar broadcast signals. In the context of this study, "stereo" refers to the dual channel electronic repro- duction of a sound in a manner that simulates a live presentation. 1Federal Communications Commission, Rules and Regu- lations, Vol. III (Washington: Office, 1964), p. 157. U.S. Government Printing FM Stereo - (or FM Multiplex Stereo) SCA - (Subsidiary Communications Authorization) Abbreviations E.I.A. _ NOAOBO N.A.F.M.B. _ NOSOROCO ‘— Ibid., p. 157. The electronic technique that permits the transmission of a stereophonic program by a single FM broadcast station utilizing its main channel and a stereophonic sub- channel. An FCC authorization that permits FM stations to trans- mit by the multiplex process specialized programs to a limited number of sub— scribers. These programs are in addition to the FM station's regular broadcast programs. Electronic Industries Association Federal Communications Commission National Association of Broadcasters National AsSociation of FM Broadcasters National StereOphonic Radio Committee (Formed by E.I.A. to recom- mend FM stereo technical standards) w CHAPTER I THE DEVELOPMENT 1952 - April 19, 1961 It is not easy for me, on a Sunday morning, to turn myself into one corner of an equilateral tri- angle. I did so last Sunday, however, at the behest of the British Broadcasting Corporation--disposing myself, my tv set, and my radio set to test the new development known as stereophonic sound . . . The only way in which I could try to obey the imperative "the volume must be the same for each set" was to turn both on full. This must have been correct be— cause, as we were told it should, the sound seemed to come from a point midway between the sets - from, in my case, an early drawing by Dali called Mire mangeant son fils. When, however, it was of its nature antiphonal (as in a table tennis match, in which the click of the balls alternated with Cries and stiffled oaths from the players), it seemed to come, as it would in real life, from each side in turn. . . . . I must say that the effect was startlingly real- istic, and also, sometimes deafening. When an ex- press train rushed through the room, the floor did-- literally, I swear-~tremble, and, since we are seven miles from a station, the cook nearly dropped the gquiche Lorraine, she was making in the kitchen. This rather humorous description of an early British attempt to transmit a stereophonic program was in broadcast technique and listener reaction similar to many conducted in the United States during the 1950's. Throughout this period, American radio broadcasters were desperately trying to find 1Thomas Driberg, "I Am a Stereophone," New Statesman, LV (May 17, 1958), P. 635. a solution to the problem of fewer listeners and advertisers; a problem created by the advent of television. FM broad- casters in particular were trying to discover some program idea, some technical innovation, some 'gimmick', to get the peOple away from their television sets and back to radio. Early FM Problems FM, or frequency modulation, was a method of radio transmission perfected in 1933 by Professor Edwin H. Armstrong.l It was immediately recognized by most electrical engineers and broadcasters as being technically superior to AM as an aural medium. FM, with its wider range of fre- quency response and almost static free reception, appeared to be the logical replacement of AM as the dominant broad- cast medium. But AM had powerful support. AM had been well established since the middle 1920's and broadcasters, who had purchased millions of dollars of AM equipment, had little desire to see their investment go down the drain. At the same time, few listeners could understand the need for buying a second completely different radio when they could already obtain all the programs they wanted on their AM re— ceiver. Fewer yet understood the technical advantages of FM radio and of those who did, many believed that there was little need for a 'wider frequency response' on such programs lLawrence Lessing, Man 9; High Fidelity: Edwin Howard Armstrong (Philadelphia: J. B. Lippincott Company, 1956), P. 206. as ”Kay Kyser's Kollege of Musical Knowledge." But FM managed to hang on. By the time that the Second World War had forced the suspension of all commercial radio develop- ment, nearly fifty FM stations were on the air and many others were in the developmental stage.1 After the war, FM continued to expand. A wartime decision by the FCC to shift the FM band, and thus render obsolete all existing FM receivers, did little to dampen the medium's growth.2 By 1949, there were 737 FM stations and more than a million FM receivers being sold annually. But then came television; television, a medium that brought a picture as well as sound into the living room. As television sets became commonplace in the living room, the big console radio was moved to the basement; and the big advertisers moved to television. In this shuffle of people and money, both AM and FM broadcasters were hit hard. Most AM stations, however, managed to stay on the air, if not make a profit, by turning to local programming that consisted mainly of music and news. But FM was not so fortunate. Continual radio listening had become old fashioned. Radio was now bew ing used to catch the morning headlines, keep mother company in the kitchen during the day, soothe father's nerves on the 1Federal Communications Commission, F.C.C. Reports, Vol. IX (Washington: U.S. Government Printing Office, 1943), pp. 362-3. 2Federal Communications Commission, 11th Annual Report (Washington: U.S. Government Printing Office, 1946), pp. 20-21. 10 way home from work in the evening, and entertain the teenage set at night. And the family found that their AM radio could do that well enough. Few people saw the reason for spending a fairly large sum of money for a second radio, an FM radio, when continual radio listening was so rarely practiced. With few listeners, FM broadcasters found that they were selling fewer advertisers, and soon the result was fewer stations. By 1956, the number of FM stations had dropped to 530. Only 200,000 FM receivers were manufactured that year. To complete this bleak FM picture, most of the FM stations that went silent were owned by independent broad— casters. At the same time, most broadcasting companies that owned both AM and FM facilities began to economize by dupli- cating their AM programs on their FM outlet. This resulted in even less reason for the listener to spend money on an FM receiver. AM—FM Stereo Fortunately, there were some bright spots on the radio scene in the early 1950's. A few 'good music' stations were experimenting with a new broadcast technique, stereo- phonic sound. As early as 1952, WQXR, the New York Times Station in New York City, began broadcasting several of its I C I I I 1 live cla551cal muSic programs in stereophonic sound. To lNat Hentoff, "FM Boom: Radio for Grown—ups," Reporter, XVII (May 1, 1958), p. 33. 11 broadcast the stereo effect, WQXR's AM and FM stations com- bined forces. (See Figure l.) The AM microphone was placed on one side of the musical group and the FM mike on the other side. The separate signals were then broadcast by each station to the home listener. The listener, in turn, placed the AM radio on one side of the room and the FM receiver on the other side. By tuning to both WQXR stations and sitting between the two speakers, a listener could hear the stereo effect. This stereo effect was soon found to be a vast im- provement over standard radio broadcasts, especially for musical presentations. In standard broadcasting, all the sounds of an orchestra reach the listener through one source, usually a small speaker. (See Figure 2.) This, however, results in a lack of realism since the effect is much differ- ent when a person attends a live concert. There the listener hears music in 'depth.' (See Figure 3.) The instruments on the left side of the listener are recognized by him as coming from the left, instruments to the right are heard as coming from the right, and instruments in front of the listener are recognized as such. In a live performance, the listener is also aware that the left side of the orchestra may be louder than the right side. All of these impulses, simultaneously received and noted by the brain, are combined into a 'real' performance for the listener. 12 mun-$0: ‘ \ .c/ /z. 4". -r/ ./-' 7 / 19960 BROADCP . / .-, -/ It I [,1 / a/ I / ,/ .\ ORCHESTRA \ ,_ <1 S”_ \‘ /\ (SOUND) : l. ’\ /Lj gm T111443! \7\ / 3 P317) 37/" ‘TNNirnIRQ /\ ukmwvsvu1r€e / \ Fm T PANSmiTFBQ so 0) \ iT LC) / // I ./' “ 9. // ' LI"? FC NC (3 13 F : G U r? C '_'_’__'C (I, .) MHU (9 H L BR \5 (1. DC. {4‘77 01261465 TR {1) '1 ,/ \« TAHNSPOIWER \ 15 Until the institution of stereOphonic broadcasts, these impulses of orchestral placement and volume were lack- ing in broadcast performances. However, with the use of two microphones and two signals, stereo broadcasts could repro- duce these impulses in the home. (Compare Figures 1 and 3.) If the center section of an orchestra was playing alone in a radio studio, both mikes in a stereo broadcast would pick up the sound in equal volume and both speakers in the home would reproduce the music equally. Since both ears would receive the same volume from the two speakers, the brain would be 'tricked‘ into believing the music was actually coming from in front of the listener. If only the right side of the orchestra was performing, the right microphone would pick up most of the volume and the listener would hear the music coming from the right side of the room. When a section more to the left began playing, the left mike would transmit more volume to the home listener and it would appear to him that the music was coming from the center right portion of the room. By this method, stereOphonic broadcasting was able to reproduce the "live" dimensions of an actual concert. Unfortunately, the AM-FM method of stereOphonic broadcasting also had many faults. As was pointed out earlier, AM sound reproduction is inferior to FM trans- missions. Thus the AM channel of a stereocast often suffered from interference and distortion. To make matters worse, the AM receiver was often of poorer quality than the FM 16 receiver. In many instances, the FM signal was weaker than the AM transmission in the outlying "fringe” areas, and again the stereo effect suffered. Because the AM-FM system re— quired two separate receivers, the listener could not just flick a switch to obtain stereo. Instead, he had to make the determined effort of turning on both sets, tuning them to the proper stations, and adjusting the volume of both sets until the proper stereo balance was achieved. For many a casual radio listener, this procedure was too much of a bother. But perhaps the greatest drawback to AM—FM stereo system was that most homes did not have an FM receiver. As a result, the listener with only an AM receiver would, in theory at least, hear only one-half of a stereo performance. In reality, the AM mike would usually transmit the sound of the entire orchestra, but with the AM side sounding much louder than the FM side to the listener. Because of this im- balance, the presentation of an AM-FM stereo broadcast would usually alienate most of the AM station's audience. This few stations could afford to do. Another problem for stereo broadcasters was the lack of stereo program material. In the early 1950's, stereo tapes and records were still labora- tory experiments.l Stations, then, were limited to stereo broadcasts of live concerts which were often few and far be- tween. However, a few stations such as WQXR continued the broadcasts. 1George A. W. Boehm, "Stereo Goes To Market," Fortune, LXIII (August, 1958), pp. 108-11. 17 FM Multiplex In 1955, FM broadcasters received an important break. In an attempt to keep FM stations financially solvent, the FCC on October 12 permitted WPEN—FM, Philadelphia, and WWDC— FM, Washington, to initiate 'multiplex' programming.l De— veloped by Professor Armstrong almost immediately after his perfection of FM, the multiplex process allows a second pro- gram signal to be superimposed on the carrier of the standard FM broadcast signal. This multiplex or 'subcarrier‘ signal is broadcast on a frequency that the ordinary FM home set could not receive. By using the subcarrier to broadcast un— interrupted background music, weather, time, or news to special receivers in supermarkets, doctors' offices, or factories on a subscription basis, many FM stations were able to remain in business when the commercial revenue from their standard broadcasts was not enough to keep them going. AM-FM Stereo Growth During the mid-1950's, AM-FM stereo broadcasting started to become more commercial and less experimental. The magazine Printers Ink reported that in 1957, more than 4O AM-FM stations were conducting stereo radio broadcasts. In the Summer of 1958, the national radio networks also be— gan conducting stereo broadcasts. The National Broadcasting 1Federal Communications Commission, 2lst Annual Rp— port (Washington: U.S. Government Printing Office, 1956), p. 104. 18 Company managed to beat out its major rival, the Columbia Broadcasting System, by three days when it broadcast the ”Telephone Hour” in stereo on June 30. From July 3 through 6, CBS carried an hour long evening broadcast of the Newport, Rhode Island Jazz Festival. In both cases, only a few AM-FM network stations transmitted the stereo version. Most of the affiliates broadcast the programs in the usual monaural method.l FM Stereo Multiplex The year 1958 was also the beginning of another type of stereo radio broadcasting. Two small electronics compa- nies, Crosby Laboratories, Inc. and Multiplex Services Corp., had each developed a stereo broadcast system that utilized only one FM frequency. Although these experimental systems required special FM receivers to receive the stereo signal, multiplex stereo did have the advantage of doing away with the second AM frequency and all of its problems. In early 1958, the FCC authorized WASH-FM in Washington, D.C. to be- gin experimental stereo broadcasts with the Multiplex Service Corp. system.2 Several other stations submitted similar applications almost immediately. On September 9, 1958, after several years of waiting, Murry Crosby, the president l"Stereo Broadcasting: A Potential New Ad Medium Looms on the Radio Dial," Printers Ink, CCLXIV (July 11, 1958), p. 31. 2Ibid., p. 34. 19 of Crosby Laboratories, was granted a patent for a trans- mission system that permitted compatible FM stereo broad— casts.l Although the system required a special FM radio to receive the stereo broadcasts, regular FM radios could also receive the stereo transmissions in monaural form. This was an important, and necessary, feature designed to save the several million FM receivers then in existence from obso» lescence. By the end of October, WBAI and WFUV in New York were conducting experimental broadcasts with the Crosby system. These broadcasts, however, were limited to a few hours per week since the only receivers capable of receiving the broadcasts in stereo were experimental models being tested by Crosby Labs. In the middle of 1958, the Federal Communications Commission also began to take a more official interest in the future of FM stereo broadcasting. As part of a rule- making proceeding initiated on July 8 to widen the scope of SCA (Subsidiary Communications Authorization) multiplex services, the FCC invited comments on the use of multiplex transmissions for stereophonic broadcasting. There was enough interest in such a stereo system for the FCC on March 12, 1959 to request comments from interested parties on the specific subject of "stereophonic broadcasting on a multiplex lU.S., Patent Office, File #44732, 1964, p. 285. 20 basis by FM broadcast stations."1 By this time, however, interest in single frequency stereophonic broadcasting was not being limited to FM. Various electronic companies had also begun to experiment with stereophonic systems for AM and television. AM Stereo In October 1958, the Radio Corporation of America demonstrated its first compatible AM stereo system. Two months later, the Philco Corp. asked the FCC for permission to make field tests of an AM stereo system that it had de- veloped. In promoting its AM stereo system, RCA used what might be called reverse psychology. An RCA vice-president, O. B. Hanson, stated quite forcefully that one advantage of his company's AM system was its_lapk of high fidelity. Hanson claimed that many people, particularly women, find it uncomfortable to attend live concerts because the extreme high notes are somewhat painful to their ears. FM radio, he said, had this same disadvantage because it could reproduce all musical sounds up to and beyond the range of human hear- ing. RCA's system, however, had a built-in advantage be- cause AM radio "automatically screens out” the high notes that might be painful to some peOple.2 The FCC, however, 1Federal Communications Commission, 25th Annual Rp— port (Washington: U.S. Government Printing Office, 1959), p. 48. 2"Stereo Broadcasting: What Does It Mean to Adver— tising?" Printers Ink, CCLXV (October 24, 1958), pp. 21-24. 21 decided to delay any field tests of an AM stereo system until a decision could be reached on an FM system. Establishing FM Stereo Standards With additional experimental stereophonic radio systems being developed by various companies in the United States and Great Britain, the Federal Communications Com- mission prepared to determine technical standards for the stereo system to be used commercially in the U.S. The elec— tronics industry through its trade group, the Electronic Industries Association, was also becoming actively interested in the problem of establishing technical standards. In the spring of 1959, the E.I.A. formed the National Stereophonic Radio Committee to review the technical factors involved in stereo broadcasting, to test the various systems in ex- istence, and to submit a final report to the FCC. The Com- mittee was composed of six panels that studied these par- ticular areas: (1) system specifications (2) interconnecting facilities (3) broadcast transmitters (4) broadcast receivers (5) field testing (6) subjective aspects. The entire study was under the policy direction of an ad- ministrative committee headed by Dr. W. R. G. Baker, the 22 director of the EIA‘s engineering department, and David B. Smith, vice-chairman of the Philco Corporation.l Both Types of Stereo Broad- casts Continued As the NSRC began to consider more than a dozen FM stereo systems, broadcasters continued to use the two-station stereo system. In some instances, separate FM stations com— bined forces in an attempt to provide high fidelity on both channels of the stereophonic broadcast. For example, WNCN and WOR—FM, both of New York City, combined to broadcast the Philadelphia Orchestra concerts in stereo. WNCN transmitted the left channel and WOR the right. As a promotional gimmick, WNCN formed 'neighborhood pools' where one person would bring his FM receiver to a neighboring FM home so that both could listen to the concert in full stereo.2 From 1959 to 1961, many FM stations were also con— ducting experimental stereo multiplex broadcasts; often with unexpected results as one Washington, D.C. station dis- covered. Although the station was broadcasting some of its programs in stereo, they were designed for experimental pur- poses only. Since commercial stereo broadcasts had not been approved by the FCC, the public was to receive the 1"Electronic Industries Association Committee to Set Stereophonic Standards," Broadcasting, LVI (February 2, 1959), p. 65. 2Julian Boone, "Sound of FM," Esquire, LV (April, 1961), pp. 62—4. 23 experimental stereocasts in the usual monaural form. How- ever, Washington hi-fi enthusiasts became so frustrated at hearing a station announcer continually state that programs were being transmitted experimentally in stereo that they be- gan to build their own stereo adapters. When the station heard about this growing do-it-yourself audience, it de- cided to discontinue the experiments because "we were getting too many listeners." The station feared that the broadcasts were taking on more of a commercial aspect than was con- sidered advisable under the FCC's experimental license.l N.S.R.C. Activity With increasing interest on the part of both broad— casters and listeners, the FCC and the NSRC came under in— creasing pressuré‘to get things moving. When the FCC dead— line for comments on its original inquiry into multiplex stereo arrived in early March, 1960, Broadcasting magazine reported that the Commission had received a "flood of com— ments" ranging from "professional technical dissertations to pleas scribbled on postcards by hi—fi enthusiasts."2 The NSRC, however, was not to be rushed. Although seven of the 14 systems originally submitted to the NSRC were eliminated " . . . either because they were withdrawn by the proponent lAllen Long, ”Next: Stereo Sound in FM," Science Digest, XLVI (December, 1959), pp. 33—36. 2"FM Stereo Comments Filed," Broadcasting, LVIII (March 21, 1960), p. 66. 24 or rejected as impractical," the Committee reported to the FCC that it was not ready to offer any recommendations.1 Its study of FM stereo up to that time represented "nothing . . 2 more than a firm foundation." The problem faced by the NSRC was a difficult one. In its studies up to March 1960, the Committee could not find one FM stereo system that was clearly superior to the others. W. T. Wintringham, the Acting Chairman of the NSRC's Panel 1 (system specifications) discussed this major problem in a letter to the British radio manufacturer, R. M. Godfrey: No doubt you are aware that when the National Stereo- phonic Radio Committee was formed, it was hoped that a very few systems, possibly as few as one, would show definite advantages over the others which had been proposed. As time has passed, however, it has become evident that nearly every system has some bene- fit not possessed by the others. This may be such a factor as simplicity of the receiver, or it may be an advantage in received signal-to-noise ratio, or it may be in the quality of performance given to the monophonic listener. Consequently, the goal of the NSRC has shifted from trying to pick a best system, to trying to appraise the comparative merits of all the systems offered. By July, the NSRC and the FCC were ready to conduct field tests of the seven remaining FM stereo systems in the Pittsburgh area and around Uniontown, Pa., 50 miles away. Prior to the field tests, stereo systems from these 1Federal Communications Commission, Notice pf PEE— ppsed Rule Making - Docket #13506, May 9, 1960, p. 1. 2"FM Stereo Comments Filed,” pp. cit., p. 66. 3U.S., Patent Office, pp. cit., p. 272. 25 manufacturers remained: Crosby-Teletronics (formerly Crosby Laboratories) Calbest Electronics Multiplex Development Corporation Electric and Musical Industries Ltd. (Great Britain) Zenith Radio Corporation General Electric Company (two systems submitted) Philco Corporation. AAAAAAA \1 C“ U1 4:- UJ N H vvvvvvv Philco later withdrew its onlysystem. General Electric a1- so withdrew one system and changed the specifications of the other so that for all practical purposes it was identical to the system proposed by Zenith. This resulted in the formation of the GE~Zenith composite system that was field tested by the NSRC. As the Committee's tests continued through the summer months, the GE—Zenith and Crosby—Teletronics systems gradually moved to the front of the competition. The Com- mittee found, for example, that the EMI system did not pro— duce "true stereo," but only an "illusion" of stereo which was not acceptable.1 The Calbest Electronics and Multiplex Development Corp. systems were also found to be unacceptable because of the lack of frequency response and stereo sepa- ration above 8,000 cycles per second. Principle of FM Stereo How did the G.E.—Zenith and Crosby-Teletronics stereo systems operate? Although there were differences in construction and operation, both systems followed the same l"Radio Stereo Group Completes Its Study," Broad— casting, LIX (October 17, 1960), p. 90. 26 basic principle of transmission. In a multiplex stereo system, two electronic signals are obtained from the sound to be transmitted; usually microphone A is placed on the left side of the source and mike B on the right. (See Figure 4.) The electronic signals from these two micro- phones are then sent separately to an electronic device called a matrix. This matrix combines these two original signals in two different ways to produce two entirely new signals. The first new signal is the electrical equivalent of the left signal plus the right signal while the second is composed of the left signal minus the right. The L+R signal then goes directly from the matrix to the FM transmitter. This is the blended signal received by the monophonic FM re— ceiver. Before the L—R signal is sent to the transmitter, however, it is first superimposed on a 38 kilocycle tone called a subcarrier. This keeps the L+R and L—R signals separate while being transmitted over the single FM fre- quency. The subcarrier with the L-R signal, which must be capable of carrying audio frequencies from 50 to 15,000 cycles per second, is then amplitude modulated. Both of the new signals are now ready to be transmitted. When the transmissions arrive at the stereo receiver, the process is reversed. (See Figure 5.) In the receiver, the two signals are first separated by a series of elec- tronic "gates" that are designed to permit only one signal frequency to pass through it. One of these gates sorts out 27 FIGURE Iv Fm m OLTipLex TRANSm ’.++€R. w / x 1. fl LEFT mike Meta-r mnxg \ \ / L . ’ R“ i \ / / MATQUL ‘1 /\ I ’ , / \ / \ / p \ / L+R. L-Tf 38 [AC ‘R “ft-“f —~ {RN do KO ) 28 Fieune v \ Fm mULTiPLex ”amen/OR \ 4+- SNyUMR tie WW ‘ / 3‘3 KC ‘ GP‘TGS’ L—‘R ”mo L+R. 38 IAC DETECTOR FYV—‘x‘l' 9.1% :21. 1...... f 42R r ! :7 :9 LEFT SNOW/4. RIGHT (39691641 29 the L+R signal and another the L—R signal. Once the L—R signal passes through the gate, a special circuit strips away the 38 kilocycle subcarrier leaving the original L—R signal. The L+R and L-R signals are then sent to a second matrix. In one section of the matrix, the L—R signal is l . electronically added to the L+R signal. In another part, the L-R signal is subtracted from the L+R signal. This is the result: L+R and L+R Although the two signals are +L—R —(L-R) 2L 2R. electronically twice as large, they are still the same signals that were originally generated by the two micro— phones in the radio studio. These two signals are then sent to individual amplifiers and speakers where they become, once again, two separate audio channels. NSRC Tests Completed On October 11, 1960, the engineering manager for the National Association of broadcasters, A. Prose Walker, re— ported to the NAB's Fall Conference that the NSRC had com- pleted its study and that a final report would be given to the FCC by the end of the week.1 It is important to remember that the FCC had to make the final decision as to the techni- cal specifications of the FM stereo system. The NSRC could only report the findings of its study and make recommendations. l"Radio Stereo Group Completes Its Study," pp. cit., p. 90. 30 The FCC in making its final decision had to consider the NSRC report, over 2,500 comments submitted by interested parties, its own knowledge of the stereo systems, the state of the FM industry, and broadcasting in general. In its final decision, the FCC could completely adopt the specifi- cations of one system or combine the specifications of two or more systems. Controversy Begins As the FCC began sifting through all of the infor— mation it had received, a controversy began raging within the broadcasting and electronics industries concerning the relative merits of the various stereo systems. Both groups had much at stake. For an electronics company, the adoption of its system would mean millions of dollars in sales and royalties. The winning company would receive royalties from stereo receiver manufacturers, producers of transmission equipment, and perhaps FM stations using the system. An FCC nod for the Crosby—Teletronics system would probably have more than doubled its 1960 sales of $1,600,000.1 Broad— casters also had a great deal at stake. Many stations had already installed multiplex equipment from various manu— facturers for experimental stereo broadcasts and SCA oper- ations. If a company using different technical specifi- cations won the FCC nod, many stations would have had to 1New York Times, April 9, 1961, p. l. 31 spend additional money to reconvert to the new stereo system. Some of the proposed stereo systems also did not permit SCA activities along with stereo broadcasts. Thus the broad- caster would have had to make a choice between the two activities; and often he could not afford to choose stereo. Although hopes soon died for an FCC decision in 1960, the fighting among manufacturers did not. Broadcasting noted on February 20, 1961, that Crosby-Teletronics was actively promoting its stereo system at a mid-February Hi-Fi Show in Washington.1 Crosby—Teletronics had also challenged the NSRC's findings on the signal-to—noise ratio of the various systems, claiming that "very poor control of measuring tech— niques" occurred during the field tests: they also charged that the conditions surrounding the field tests were poor, and complained that the NSRC used poorly adjusted receivers. Finally, however, on April 19, 1961, the Federal Communi- cations Commission published its decision; its choice was the composite system developed by the Zenith Radio Corpor— ation of Chicago and the General Electric Company of Schenectady, New York. The FCC Decision In its report, the FCC noted that both the Crosby— Teletronics and Zenith—GE systems reproduced the full audio l"Opinions Differ on Value Stereo Will Have for FM," Broadcasting, LX (February 20, 1961), p. 96. 2Norman Eisenberg, "FM's Next Chapter-Stereo," High Fidelity, XI (April, 1961), pp. 48—51. 32 range of human hearing for both stereo and monophonic broad- casts. Both systems also had good stereo separation through- out the range. For the monophonic listener, the FCC found that the distortion in the two systems was about equal. But in stereo broadcasts, under some conditions, the Crosby- Teletronics system had a higher degree of distortion than the GE-Zenith system. The FCC concluded that the cost of overcoming these distortions would be less in the Zenith-GE system. In both systems, the FCC found the stereo signal to be weaker than the monophonic signal. With increasing distance, and under otherwise identical conditions, the Zenith—GE system had a greater stereo signal loss than Crosby-Teletronics. In monophonic broadcasts, however, the Crosby-Teletronics system had a greater signal loss as the distance increased. The FCC concluded that this was a strike against Crosby-Teletronics rather than G.E.—Zenith. In backing up its decision on this important point, the FCC cited its May 9, 1960 Notice_pf PrOposed Rule Making: any stereophonic system adopted should be based upon standards capable of rendering as high a quality of service as the art can provide, consistent with economic and other factors involved, and without sig- nificant degradation of the service now provided under existing FM rules.l One of the most influential factors affecting the FCC decision, however, was the inability of the Crosby-Teletronics system to handle simultaneously the transmission of stereo 1Federal Communications Commission, Report and Order- DQcket £13506, April 19, 1961, p. 13. 33 and SCA broadcasts. A station using the Crosby-Teletronics system would have had to choose between stereo broadcasts to the home listener and the SCA.broadcasts which often kept the FM station financially solvent. In its report, the FCC noted that a number of FM station operators had told it that they could not afford to make this choice. One such state- ment came from the then president of the National Association of FM Broadcasters and co-owner of KITT—FM in San Diego, C. Frederic Rabell: It would be a financial disaster for FM if only a single carrier system is adopted by the FCC. In my opinion, it's impossible for the FCC to pick one sub- carrier. If they do, the stations with the single subcarrier now won't go to stereo because that back- ground music operation has been supporting them all along. The FCC was also quick to point out that the Crosby- Teletronics system would probably have deprived the smaller cities of stereo service more than it would have the larger urban areas. It noted that in the larger cities, only a small proportion of the FM stations were involved in SCA activities. However, 81 of the 250 stations holding SCA per- mits were located in cities where they were the only FM station. In these on-station cities, the Commission noted that the inability of the Crosby—Teletronic system to provide both SCA and stereo transmissions: assumes greater importance, for a decision by station management to continue with SCA operations 1”What About Stereo FM Programs?" Electrical Merchan- dising Week, XCIII (September 12, 1960), p. 3. 34 would deprive the community of local stereophonic broadcast service for an indeterminate period of time.1 The FCC found one further fault with the Crosby— Teletronics system. If it had been selected, home stereo receivers would have been able to receive illegally the SCA broadcasts from local FM stations that chose to "storecast' rather stereocast. While the Zenith-GE system also allowed the transmission of an SCA channel, the home stereo receiver would be unable to pick it up. Shortly after making its decision, the FCC was to comment: "The attraction of the accepted FM (stereo) system for broadcasters is understandable;" but if the FCC believed that their decision would end the controversy surrounding FM stereo, they were soon proven wrong. 1Federal Communications Commission, pp. cit., p. 9. 2"What's All This About Multiplex? Questions and Answers," Consumer Reports, XXVI (July 1, 1961), pp. 422-23. CHAPTER II THE PREPARATIONS April 19, 1961 - June 1, 1961 "FM stereo is the new sound of broadcasting which has given FM something AM cannot provide."1 "We're banking on stereo FM being a step forward in quality and not a technological stunt."2 "It will be a gimmick, but we're being forced into it anyway."3 ”In my opinion, this stereo stuff will never make a dent as a mass medium."4 And so the controversy continued . . . before, during, and after the Federal Communications Commission's decision. To better understand the controversy that sur- rounded the preparations for FM stereo, this chapter concen— trates on three broad groups that were directly concerned with l"Stereo Gives FM Something Extra,” Broadcasting, LXI (August 28, 1961), p. 81. 2Wall Street Journal, May 16, 1961, p. 1. 3Ibid., p. 1. 4"Stereo Broadcasting: A Potential New Ad Medium Looms on the Radio Dial," pp. cit., p. 31. 35 36 FM stereo: the government, the electronics industry, and the broadcasters. GOVERNMENT the Commission from time to time, as public con- venience, interest, or necessity requires shall study new uses for radio, provide for experimental uses of frequencies, and generally encourage the larger and more effective use of radio in the public interest. Confusion Among Manufacturers When the FCC released its Report and Order on April 19, 1961, it established June 1 as the starting date for FM stereo broadcasting. In its original news release, the FCC stated that the approved system was the one submitted by Zenith-GE with certain modifications. This left a few manu- facturers with the impression that some of the technical de- tails might not have been finalized by the FCC. After quick inquiries, however, they learned that the FCC's Report and Order contained all of the data and standards that the agency intended to issue. This fear that the FCC hadn't decided completely on one of the five original systems field tested by the NSRC was partly the result of some manufacturers' de— cisions to 'play it safe.' These companies, anxious to be the first on the market with stereo receivers, had designed sets for each of the systems under consideration. Some had lU.S., Communications Act f 1934 _§ Amended, Sec. 303. 37 even gone so far as to set up pilot assembly lines for each receiver. Thus if the FCC had made substantial changes in the Zenith—GE system, these manufacturers would have been forced to, in effect, 'go back to the old drawing board.‘ Reaction to Decision The reaction of most broadcasters and electronics manufacturers was to applaud the FCC's decision to standardize on the GE-Zenith system. Some, however, had been caught off guard. One official of WABC-FM in New York City noted that many broadcasters had expected the FCC to approve the Crosby- Teletronics system rather than the one by Zenith-GE.l A typical reaction from the electronics industry came from Victor H. Pomper, the executive vice-president of the H. H. Scott Company, a producer of high fidelity components. Pomper was quoted by Broadcasting as being "delighted" with the decision. He stated that: "In years past, the FCC has occasionally acted hastily or improperly, but this time we feel the case was considered strictly on its merits and that a sound decision was reached.”2 However, all manufacturers were not completely happy with the FCC decision. Gardner Greene, the president of Browning Labs, another component manufacturer, complained that FM stations engaged in SCA 1"FM Stations See Ad Boost From Stereocasting," Advertising Age, XXXII (May 22, 1961), p. 3. 2"Stereo FM Opens New Vistas," Business Week (April 29, 1961), p. 54. 38 activities would have to go to "great expense" to convert to stereo under the Zenith-GE system.l FCC Stands Pat The FCC, however, was ready to back up its decision. Harold L. Kassens, the chief of the FCC's aural existing facilities branch, quickly pointed out that the Zenith-GE system had only been chosen by the FCC after a long testing period. He reemphasized that an FM station could use the system for SCA broadcasts at the same time it was broadcast- ing in stereo. The NAB's engineering manager concurred with Kassens and stated that he considered the FCC decision to be a sound one.2 The Broadcast Bureau of the FCC also came to the support of the Commissioners' decision. Its assistant chief, James E. Barr, told the Western Electronics Show and Convention in late August that the FCC had done its part to insure the highest quality possible in stereo broadcasting by establishing high standards in its selection of the Zenith- GE system. Now, he stated, it was up to the manufacturers and broadcasters to follow through. Barr noted that the FCC favored stereo because it would bring FM to the attention of the general public and perhaps increase the distribution of FM receivers in the United States.3 l"Is Stereo FM’s New Stronghold?" Broadcasting, LX (May 15, 1961), p. 44. 2Ibid., p. 44. 3H . . Stereo Gives FM Something Extra,” pp. cit., p. 81. 39 ELECTRONICS I NDUST RY As was stated in the previous section, most elec- tronics manufacturers greeted the FCC decision with enthusi- asm. ”We're convinced that for the electronics industry, it‘s the greatest thing since television," said the president of Zenith Radio, Joseph Wright.l "FM stereo has one of the brightest futures in the field of home entertainment products," stated William Clemmens, marketing manager for GE's radio division.2 But while Zenith and GE were smiling on the outside, events were seething beneath the surface. A Patent Dispute Emerges Two problems hit the giant manufacturers in less than a month after the FCC decision. The first was caused by the company that had lost out in the FCC decision, Crosby— Teletronics. While GE and Zenith both claimed to have de- veloped the FCC approved stereo technique, neither had filed any basic patents on their system. Crosby-Teletronics, how- ever, claimed that it had held a basic set of patents cover- ing FM stereo for several years. To back up its claim, Murry G. Crosby, the president of Crosby-Teletronics, pre- sented the patents he had been granted in 1958 for a 1Wall Street Journal, pp. cit., p. 1. 2"Is Stereo FM's New Stronghold?" pp. cit., p. 44. 4O technique of transmitting FM stereo signals compatible with existing FM monophonic receivers. In the opinion of many electrical engineers, his patents were basic ones. At a technical symposium held on May 12, Crosby-Teletronics an- nounced royalty rates of 50 cents per receiver for the first 25,000 units and 25 cents thereafter. For kits and adapters, the royalty was 30 cents for the first 25,000 units and 15 cents for any additional units.1 By May 20, nearly two dozen radio receiver manufacturers, including such large companies as the Admiral Corporation, had applied for licenses to produce receivers under the Crosby patents. GE and Zenith quickly refuted Crosby's claim. William Clemmens of GE stated: "I have been advised by our patent attorneys that we do not need a license under the Crosby patent for the G.E. system approved by the FCC." Zenith's Chief Engineer, J. E. Brown said bluntly: "Crosby's patent is not effective."2 Brown later confessed, however, that he couldn't "understand how anything so new can be so thoroughly fouled up."3 Crosby, himself, admitted that the validity of his patents would probably have to be tested in the courts, and on September 7, his company filed suit (against General Electric) in the U.S. District Court for l"Patent Discord Hits Stereo FM," BUSineSS Week (May 20, 1961), p- 124- 2"Feud in FM Stereo," Electrical Merchandising Week, XCIII (May 15, 1961), p. 4. 3"Patent Discord Hits Stereo FM," pp. cit., p. 124. 41 the Southern District of New York. The charge stated that G.E. has infringed on " . . . a Crosby patent covering the method and equipment for the reception and broadcasting of stereophonic radio programs."1 GE-Zenith Dispute While Zenith and GE may have been presenting a united front against Crosby-Teletronics, there was little sweetness-and—light between the two companies. In late April, a dispute arose between Zenith and General Electric when GE ran a full page advertisement in several national publications, including the Wall Street Journal, New York Times, and Home Furnishings Daily, with the bold headline: "Announcing . . . Stereophonic FM Radio Pioneered and Proved by General Electric." The advertisement went on to say in part: Last week a dramatic new advancement in radio be— came a reality. The Federal Communications Com— mission approved a General Electric developed system of FM stereophonic radio broadcasting The General Electric Company, the leader in de- veloping the broadcast system selected by the FCC will also be the leader in creating new radio re- ceivers on which you will hear this fine home entertainment.2 Such a claim, with no mention of the word "Zenith," naturally upset that company. Joseph Wright, Zenith's presi- dent, immediately denounced the claims as "completely untrue," 1New York Times, September 8, 1961, p. 51. 2New York Times, April 24, 1961, p. 17. 42 and wired a complaint to the Federal Trade Commission "to investigate the matter and use its power to stOp this unfair method of competition." Wright pointed out that Zenith engineers had been working on the FCC approved system for over three years. "Zenith was authorized on March 4, 1959 to put its system on the air experimentally . . ." while, " . . . on that date, GE was urging the adoption of a com~ pletely different system . . ." Wright then went on to say: It is incredible to us that GE, which made only minor, if any, contributions to the system as finally adOpted, should now spend vast sums of money in full-page advertisements falsely claiming to be the sole and original developer of this new radio service. On April 25, Wright wired GE Chairman, Ralph Cordiner, to correct the matter, but when no reply was forthcoming, Wright lashed out: " . . . this is part of a deliberate cam- paign of misrepresentation for the purpose of attempting to obtain an unfair commercial advantage " A reply was presented to Mr. Wright, but by the general manager of GE's radio and television devision, Hershner Cross. He replied, in part: Our claims of achievement . . . had been thoroughly reviewed prior to placing our advertising by our engineering personnel and attorneys. Your reference to our proposal as a "minor change" makes us believe some of the significant points in our proposed standards have not come to your attention. We feel that the acceptance by the FCC of the standards we employed in all of our experimental broadcasts and submitted to the FCC fully entitles us to the claims we are making.1 l"Zenith Hits GE Ads, GE Defends Claims," Editor and Publisher, XCIV (May 13, 1961), p. 26. 43 Then, almost as quickly as it had started, the dispute ended. Officials for both companies apparently believed that they had effectively made their points and that there was little to be gained from continued fighting. Most other manufacturers weren't too concerned about the two disputes, and they probably enjoyed the feuding from the sidelines. Since most set manufacturers had the basic knowledge needed to produce FM stereo equipment, the pre- vailing attitude seemed to be to let the combatants settle it in court. As long as detailed engineering proposals from GE and Zenith could be photostated at FCC offices and techni— cal seminars were being held by the major companies, the other set manufacturers really didn't care to whom they paid their royalty fees.l Plans For Set Production Perhaps one of the biggest reasons for GE and Zenith ceasing their in-fighting was that both wanted to get down to the business of manufacturing and selling stereo FM re- ceivers. Zenith's president commented in the middle of May that his company believed " . . . stereo FM will add fifty to seventy five million dollars to industry receiver volume in 1962 . . . and the full impact will not be felt for about two years."2 Two areas of marketing were Open to l"Feud in FM Stereo," pp. cit., p. 4. 2 Wall Street Journal, pp. cit., p. 4. 44 manufacturers of FM stereo equipment. The first area was stereo adapters for FM monaural sets already in existence. Many manufacturers, in anticipation of the time when stereo standards would be established, had been installing multi— plex jacks in the backs of their monaural sets for several years. The second area of marketing, of course, was a com- plete line of new FM stereo receivers. At first glance, the stereo adapter market appeared to be a lucrative one. By the middle of 1961, there were an estimated 15 million FM receivers in the United States, and stereo adapters were expected to sell at anywhere from $25 to $100. But after the first glow of enthusiasm at the pros- pect of millions of dollars in sales faded, manufacturers be- gan to take a more critical look at the proposed adapter market. When they did, they found the rather disquieting fact that as many as 65% of the FM receivers probably weren't worth adapting for stereo. As one manufacturer stated at the Crosby-Teletronics technical seminar: "It wouldn't make much sense to put a $100 adapter on a $20 set." When it was suggested that the adapter market would be popular among hi— fi bugs, another manufacturer commented: ”But if they are real bugs, they'll want~a whole new tuner designed for ..1 stereo As a result, Zenith decided not to produce adapters, and General Electric only produced one designed l”Patent Discord Hits Stereo FM," pp. cit., p. 124. 45 for its own monaural FM receivers. By the first of June, the set manufacturers had split into three major camps: those such as Zenith who had decided not to produce stereo adapters; those at the other end of the pole, such as RCA, who concentrated on marketing adapters for all FM receivers; and finally, the manufacturers who decided to market a limited number of adapters at the beginning and then turn to complete FM stereo receivers later.1 The manufacturers were also having trouble producing their complete lines of FM stereo receivers. One problem was that the FCC decision came at a time when the receiver manu- facturers had already finalized their plans for most of the 1962 models. GE and Zenith, along with the other manu— facturers, also faced problems in establishing and coordi- nating assembly lines for this entirely new product and in obtaining the new parts needed for circuits that only recently had been approved by the FCC. These problems forced General Electric to tell its dealers that it would have combination AM-FM—FM stereo—stereo phonographs on the market sometime in June, but that smaller FM stereo receivers would have to come later. Zenith told its dealers that it wouldn't have stereo consoles available until shortly after Labor Day and warned that table models would not be available for another ninety days after that. Most manufacturers faced the same 1"Three FM Stereo Roads Converge in Chicago," Electri- cal Merchandising Week, XCIII (July 24, 1961), pp. 2-3. 46 problem of having no stereo models to show their dealers until late June or July and no sets for sale until fall. The Chicken and The Egg It may, perhaps, be asked why so much emphasis has been placed on the actions of receiver manufacturers. It must be remembered, however, that FM stereo was an entirely new product. Before June 1, 1961, there were no FM stereo receivers on the market and no FM stations broadcasting com- mercially in stereo. As a result, a basic problem arose; what should come first into a market, the set or the station? The trite question, "What's first, the chicken or the egg?" was facing both broadcasters and dealers. The FM broad- caster saw little reason to spend a large sum of money for stereo transmitters, studio equipment, and program material when nobody could listen to it. But by the same token, the retail radio dealer and the general public saw even less need to spend anywhere from $25 to $300 for a special stereo receiver when there weren't any local stations broadcasting in stereo. Thus the future of the FM broadcaster, and of FM stereo broadcasting, depended to a great extent on the de- cisions of the FM receiver manufacturer and retailer. This problem is examined in more detail in the next chapter. 47 BROADCASTING Broadcaster Reaction The reaction of broadcasters to the FCC's April 19 decision was similar to that of the electronics manufacturers. For example, Lawrence Gordon, vice—president of WBUF (FM) in Buffalo, New York, commented: "You have to sit down in front of the set and deliberately listen to get the stereo effect, and I don't think that a housewife with a houseful of kids is going to do it.”1 A Los Angeles broadcaster, how- ever, said he regarded the FCC decision as, "the date AM died."2 Although broadcasters disagreed over the value of FM stereo, they did agree that PM was still the 'poor sister' of AM. Despite an accelerated growth rate, from a low of 553 commercial stations in 1955 to about 800 in April, 1961, most FM stations were having trouble attracting the listener, and the advertiser. To combat this, FM broadcasters were looking for something that would catch the interest of the public and the advertiser. To them, stereo might just be that something. James Gabbert, co—owner of a San Francisco FM station, KPEN, stated what many broadcasters believed to be stereo's main selling point: "FM stereo is the new sound of broadcasting which has given FM something that AM cannot 1Wall Street Journal, Op. cit., p. 16. 2"Stereo FM Opens New Vistas," pp. cit., p. 54. 48 1 Thus stereo boosters began arguing that FM stereo provide." would be the one thing they needed for identification with advertisers and agencies. Many FM broadcasters also hOped to recapture the hi-fi fans who were lost when home stereo- phonic phonographs were introduced in 1958. Decisions The advent of stereo, however, brought the broad- casters new problems as well as new hope. What would stereo cost the station? Could it recapture that cost? Will adver- tisers buy it? Will the public buy it? Is it really an amazing new service? The decision of whether or not to broadcast in stereo often depended upon the FM station's programming policy. If the station was duplicating a key AM station, or broadcasting rock and roll, there was little im- mediate interest in stereo. Audiences of these stations were not necessarily interested in high technical standards and much of the program material would not be improved by the addition of stereo. There was, however, at least one exception. Herbert Mendelsohn, sales manager for WABC—FM, New York, reported that his station expected to adopt stereo before the end of the year. Although the FM affiliate had been duplicating the programming of its sister AM station, Mendelsohn stated: ”We hOpe to adapt to stereo as soon as l”Stereo Gives FM Something Extra," Op. cit., p. 81. 49 we can, but it still has not been determined when the trans- mitting equipment will be available and how much it will cost."1 Usually, independent "good music" stations were the most eager to broadcast in stereo. "One hour after the government gave the green light . . . we were on the phone looking for stereo broadcasting equipment," reported Leo Hoarty, the general manager of WFFI (FM) in Norfolk, Virginia.2 Independent broadcasters were naturally concerned about the cost of conversion to FM stereo. With no manu- facturer yet having FCC approved equipment or price lists available, estimates of the cost of conversion to multiplex stereo ran from $1,000 to more than $4,000. For FM station operators who saw red ink on their books much more often than black, this was a sizeable amount of money. "There goes my lunch money," commented one station Operator.3 Extent of Stereo Accpptance At this early date, just how extensive were the de- cisions to, or not to, engage in stereo broadcasting? Only scattered surveys appear to have been made during April and May, and the reliability of their results is questionable. They do, however, give a general picture of broadcaster l"FM Stations See Ad Boost From Stereocasting," pp. cit., p. 3. 2Wall Street Journal, pp. cit., p. l. 3 ”Is Stereo FM's New Stronghold?" pp. cit., p. 44. 50 acceptance of FM stereo. One survey was conducted by the John B. Knight Company for the National Association of FM Broadcasters and released on May 1, 1961. With returns from 212 FM stations, the survey reported that approximately two out of five (41.8%) stations definitely planned to broadcast in stereo. Only one out of eight (12.5%) stated that they definitely were not planning on stereocasting. A majority of stations (45.7%) reported that they hadn't yet decided one way or the other.1 A smaller survey conducted by the Wall Street Journal and published on May 16, reported even more optimism towards FM stereo. Of 50 FM officials con- tacted, 60% stated their stations planned to be broadcasting in stereo within six months; another 10% said they would be broadcasting in stereo within a year. The Journal also noted that most of the remaining FM broadcasters hadn't definitely ruled out FM stereo, but were simply undecided.2 From these two small surveys, it does appear that perhaps about half of the FM broadcasters were planning to begin stereo operations sometime in the near future while most of the remainder had not made up their minds. With this rather broad review of the broadcasting industry's expectations towards FM stereo completed, we will now study the industry more deeply. To do this, the 1"Study Shows 41% of FM Stations Plan Stereo," Broadcasting, LX (May 1, 1961), p. 72. 2Wall Street Journal, pp. cit., p. l. 51 remainder of the chapter is divided into three segments: engineering, programming, and advertising. Engineering Immediately before the beginning of FM stereo broad- casting, both knowledge and equipment were limited. Stations engineers could do little except read the scattered material available about the technique and consult with various equip— ment manufacturers. Many stations planned to adapt their present multiplex equipment for stereo transmissions while others began searching for new equipment. No electronics manufacturer, however, had an actual stereo FM transmitter on the market, nor had any even received type acceptance from the Federal Communications Commission.1 The FCC, how— ever, decided to allow stations to begin stereo broadcasts with their existing multiplex equipment without any further authorization. sThe stations did, however, have to notify within ten days the Commission and the FCC Engineer in Charge of the radio district where they were located, that they were preparing to begin stereo broadcasts. 1All broadcast transmitting equipment must receive "type acceptance” from the F.C.C. before the Commission will grant the manufacturer a license to produce the equipment for commercial broadcast use. Type acceptance is based on the results of tests made by the manufacturer and evaluated by the F.C.C. These tests are run to determine if the equip— ment is capable of meeting the applicable F.C.C. technical standards for broadcast transmission equipment. 52 Programming While FM engineers were facing the problems of ob- taining stereo equipment, FM program directors were beginning to have troubles of their own. Their biggest difficulty was to obtain quality and quantity in their stereophonic broad- cast material. Stereo recordings had been available since 1958, but, of course, many of them featured identical se- lections by different artists. For FM stations with a limited programming range, this quickly resulted in a short— age of suitable recordings. Quality also proved to be a problem for the FM program director. Many of the early 'stereo' releases were not actually recorded in stereo, but consisted instead of older monaural selections 'electronical- 1y enhanced' for stereo. These 'stereo' selections were usually two channels of the same sound tract that had been varied somewhat in volume. Such recordings proved a poor substitute for the FM program director who knew the exciting realism that prOper stereo recordings could provide. The FCC in its final Report and Order of April 19 noted another difficulty with stereo recordings. It reported that some stereophonic records failed to provide good monophonic repro- duction when their two channels were blended by the L+R method. The FCC's only advice was for: "FM stations en- gaging in stereophonic broadcasting . . . to exercise ap- propriate discretion in the selection of program material."l 1Federal Communications Commission, pp. cit., p. 10. 53 Advertising Probably the biggest concern of an FM broadcaster was whether the addition of stereo would increase his station's revenue. Advertisers had expressed some interest in stereo when the old AM-FM system was being used. The Am— pex Audio Company, for example, used AM—FM stereo radio in 1959 and 1960 to promote its line of stereo tapes and re— corders in the top ten national markets. The major theme of the Ampex campaign was, “Stereo sounds best on tape - tape sounds best on Ampex."l Another successful example occurred in Beverly Hills, California where two FM stations joined to— gether to broadcast four hours a week of the Boston Symphony Orchestra. While noting that the stations' AM-FM stereo pro— grams were sold out, Arthur K. Crawford, the commercial manager for one of the FM stations, also reported: We charge $100 for four minutes of commercials on regular FM broadcasts, but we get $425 for four minutes on stereo broadcasts. That's a devil of a premium. We're convinced the new FM stereo broad— casting will mean a real boost for our profits.2 Even the most enthusiastic broadcasters, however, did not expect to increase their advertising rates immedi- ately after turning to stereo. Most believed that there would have to be a large number of receivers in their markets before many companies would be interested in stereo l"Ampex Schedules 10 City Stereo Radio Push," Adver- tising Age, XXX (September 28, 1959), p. 84. 2 wall Street Journal, pp. cit., p. l. 54 advertising. Although this wait for listeners was expected to take at least a year, commercial managers were enthusi- astic about the long range outlook. They were quick to note that a stereo station would retain its regular monophonic listeners while adding an entirely new audience whose interest in FM had been aroused by stereo. The broadcasters were al— so quick to point out that much of the stereo audience would consist of a high—income, "quality" listener that advertisers would be willing to pay more to reach. J. A. Englebrecht, the president of an Evansville, Indiana, FM station, WIKY, stated his expectations bluntly: There‘s just one thing pushing us into FM multiplexing, and that's the desire to make money. We'll have a strong talking point with advertisers and we're sure it will gather listeners and consequently improve advertising rates.1 Many broadcasters expected the first spurt of stereo advertising to come from the manufacturers of stereo equip- ment. The broadcasters believed that these receiver manu— facturers would be eager to reach the segment of the popu- lation that was already interested in the good sound repro— duction of monaural FM radio. Others thought that stereo record manufacturers would advertise on FM stereo to demon- strate their records and tapes just as Ampex had done a few years earlier. Their hopes appeared, at least to some ex- tent, justified. "We will use FM to advertise this new 1Ibid., p. 16. 55 service,” stated Williams Clemmens, the radio receiver marketing manager for General Electric.1 Manufacturers, the government, and broadcasters all had high hopes for FM stereo. Manufacturers had devoted much time and money to the development of FM stereo. The Federal Communications Commission, long under fire for setting aside a large part of the valuable radio spectrum for FM broadcasting, hoped that FM stereo would provide the boost needed to really start the industry moving. Broad— casters believed stereo might be the means of obtaining the listeners and advertisers needed to help their stations be- come financially solvent. Other broadcasters, interested in stereo's ”good music" qualities, expected it to be the ulti- mate sound in radio broadcasting. Were these expectations justified? Has FM stereo been accepted by broadcasters, advertisers, and listeners? Chapter III reports on the growth and acceptance of FM stereo broadcasting since its birth on June 1, 1961. 1"Is Stereo FM's New Stronghold?" pp. cit., p. 44. CHAPTER III THE GROWTH June 1, 1961 - 1964 What's ahead for radio? If I had been asked that same question in 1939, I would have answered - FM broadcasting. Today, 23 years later, something new has been added and I say to you FM—Stereo is what's ahead for radio.1 On June 1, 1961, FM stereophonic broadcasting became a reality. On that date, two stations notified the Federal Communications Commission that they had begun stereo broad- casting. WGEM, the General Electric-owned station in Schenectady, New York, was the first FM station in the country to broadcast in stereo on a regular commercial basis. It conducted its first stereo transmission at midnight, Eastern Daylight Time. Zenith Radio Corporation's FM station in Chicago, WEFM, also began its stereo broadcasting at mid- night; but being in the Central Daylight time zone, it followed WGFM by one hour.2 Although not officially reported 1Robert T. Bartley, EM StereojA.Qpality Service_in the Public Interest, An address before the Electronic Industries Association Symposium, New York, June 26, 1962 (Washington: Federal Communications Commission, 1962), p. l. Federal Communications Commission, "Broadcast Primer," February, 1964, p. 14. 56 57 by the FCC, a third FM station, KMLA, Los Angeles, also pre— sented its first stereo broadcast at midnight, June 1 (Pacific time).1 This was the inauspicious beginning of FM stereo; only three of the more than 800 FM stations trans- mitting stereo broadcasts to few, if any, stereo receivers. But FM stereo was to grow. It would not expand as fast as many had hoped, or predicted, but grow it would. The same pattern will be followed in this chapter as in Chapter II. The chapter will commence with a review of the limited governmental role since June 1, 1961, followed by similar studies of the electronics manufacturers and broadcasters. GOVERNMENT "While FM stereo must be regarded as an adjunct to monaural FM service, the FCC is hopeful that it will add a new dimension to FM listening."2 When June 1, 1961 arrived, the Federal Communications Commission had completed the most difficult part of its job. Reports had been studied, arguments heard, and standards established. Two basic tasks remained for the FCC; police the technical standards of FM stations already broadcasting lDon Weage (KMLA Program Director), Los Angeles, letter, December 9, 1964, to the author. 2U.S., Federal Communications Commission, 27th Annual Report, 1961, p. 55. 58 in stereo, and promote FM stereo in an effort to make it more pOpular with both the broadcaster and the listener. Policing In the two months of heavy promotion before June 1, 1961, one of FM stereo‘s best selling points was the high technical quality of its sound. With the start of com— mercial stereo broadcasting, however, it soon became ap- parent to broadcasters, electronics manufacturers, and the FCC that there would be problems in keeping these standards high. In July, 1961, FCC Commissioner Robert E. Lee warned a group of receiver manufacturers that all the work done by the FCC and the NSRC to insure the high quality of FM stereo would be worthless if the equipment they produced did not meet the established technical standards. He also expressed the hOpe that the competition among the receiver manu- facturers " . . . would not result in killing the goose that lay a beautiful golden egg."l A year later, Commissioner Bartley repeated Lee's warning: Whether the world continues to beat a path to the door of FM stereo depends largely, I believe, on whether its quality is maintained. Remember, in FM stereo, the quality's the thing! It is the very foundation of the medium. If you would have FM stereo reach the peak of its potential take your case to the people! Let their sense of hearing convince them that here is truly a new perception in program enjoyment . . . a new and 1J. F. Meagher, "Stereo FM is Potential Bonanza,” Advertising Age, XXXIII (July 24, 1961), p. 97. 59 wonderful service in the public interest. But kee it in the public interest! Keep the quality high! As more stations initiated stereo broadcasts, the FCC and set manufacturers began to receive complaints from retailers, servicement, and listeners that some stations were not transmitting properly. In an attempt to solve this problem, FCC staff engineers met with EIA representatives in October, 1962. At this meeting, the EIA agreed to establish a nationwide monitoring system that would assist the FCC in checking the transmissions of FM stereo stations. If the monitors discovered any transmissions that deviated from ap- proved standards, they were to report the stations to the FCC for disciplinary action. Promotion In addition to many speeches such as the one cited in this report by Commissioner Bartley, the FCC used other measures to promote FM stereo. Its first action was to make certain that the word "stereo" would always be associated with the highest broadcast quality possible. In July, 1961, FCC Commissioner Robert E. Lee told a symposium conducted by the National Association of Music Merchants that the FCC would not consider standards for AM stereo in the near future. Lee commented: I for one am in no mood to even study, let alone approve, stereo in the AM band. I believe it would be lBartley,pp. cit., pp. 6-7. 60 contrary to the public interest if the term 'stereo' were at— 1 On September 27, tached to less than high audio quality." 1961, the FCC officially denied petitions by the Philco Corporation, RCA, and Kahn Research Laboratories for the institution of proceedings that would lead to the adoption of AM stereo standards. No action was taken on another pe— tition by Philco that asked the Commission to study the feasibility of stereophonic sound for television. The FCC also broadened the base of FM stereo by calling for a discontinuance of AM-FM stereo broadcasts on the grounds that they were no longer necessary or desirable " . . . insofar as the monOphonic listener is concerned." On December 18, 1961, the FCC announced that it was also permitting educational FM stations to conduct stereo broad— casts. These noncommercial stations, naturally, had to follow the same technical requirements as commercial FM stations. ELECTRONICS INDUSTRY Admiral Corporation: ”Fine development, excellent prospects." 1Meagher,.pp. cit., p. 97. 2On November 12, 1964, the FCC instituted such an in- quiry. The Commission invited comments on the desirability of stereo sound for television, methods of transmission and reception, availability of stereophonic program material, and program techniques that could be utilized. 3Federal Communications Commission, pp. c1t., p. 11. 61 Philco Corporation: "It's a good, good service, but it's a minor good business from our standpoint." Radio Corporation of America: "It's an important extra, but I'm not sure we'll see a speed growth curve." Zenith Radio Corporation: "Don't oversell this. Sell it as something fine. It will be a good, steady, solid product."1 Second Thoughts Develop By July, 1961, second thoughts about the rapid suc- cess of stereo began appearing among the producers of FM stereo receivers. The above comment by Zenith contrasts sharply with the statement: "We're convinced that for the electronics industry it's the greatest thing since tele- vision," that Zenith's president, Joseph Wright, issued just one and one-half months earlier.2 Convinced, perhaps, that an FM stereo boom was not going to start by itself, the industry began settling down to the job of selling FM stereo to dealers, consumers, and broadcasters. By the end of July, the EIA had begun mailing 100,000 copies of a booklet en— titled "A New World of Broadcast Sound," to FM station owners and radio receiver dealers. The 15 page booklet, paid for by thirteen radio manufacturers, described FM 1"Second Thoughts on FM Stereo," Electrical Merchan— dising Week, XCIII (July 10, 1961), p. 11. 2 Wall Street Journal, pp. cit., p. l. 62 stereo and explained why it was superior to any other broad- cast sound. It concluded on the optimistic note that: " . . . a demonstration, in dealer showrooms, will convince any listener . . . that this is truly a whole new world of broadcast sound."l Manufacturers Start Advertising The electronics manufacturers were also preparing to take their case to the consumer himself. By the first of September, General Electric had prepared an advertising cam- paign that included national magazines and co-operative advertising with local dealers. Most companies, however, conducted their advertising campaigns almost entirely on the local level, and often they were the first, and only, adver— tisers on a new stereo station. For example, when WTFM, New York, began stereocasting on November 25, 1961, twelve elec— tronics companies were the first and only sponsors to sign with the station. Placing 26 week schedules of up to 40 spots per week on the station were: Admiral, DuMont, Emer- son, General Electric, Grundig Majestic, Motorola, Pilot Radio, H. H. Scott, Stromberg-Carlson, Westinghouse, and Zenith. Despite these advertising efforts, the 'chicken and egg' situation did begin developing after June 1. In many lElectronic Industries Association, A New World pf Broadcast Sound, 1961, p. 15. 63 markets, dealers hesitated promoting FM stereo receivers un- til FM stereo broadcasts were available. FM broadcasters, in turn, were waiting for dealers to sell enough sets to justify the costs of converting to stereo. In an effort to overcome this cycle, Zenith advertisements in several national magazines urged "forward—looking" consumers to purchase FM stereo receivers even if there were no stereo stations in the community because lopal stations would soon catch up with the trendfl It appears that when a station did begin broadcast— ing in stereo, receivers were eagerly snapped up by the listeners. When WHDA in Dover, New Jersey, began stereo broadcasts, local dealers quickly sold the few stereo sets they had on hand. The station was then so swamped with callers wanting to know where to purchase stereo receivers that it had to run advertisements in the local paper asking the eager listeners to be patient.2 The manager of a Coral Gables, Florida station, WVCG—FM, reported that within a week after his station began stereocasting, over $150,000 in stereo FM receivers had been sold in the area. Thirty days , after KPEN in San Francisco began stereo broadcasts in August, 1961, a survey reported that while complete stereo l"Is Multiplex Radio Ready to Explode?" Printers Ink, CCLXXVIII (February 9, 1962), p. 13. 2C. P. Gillmore, "What You'll Want to Know About FM Stereo," Popular Science; CLXXX (June, 1962), p. 78. 64 receivers were only available in limited numbers, more than 3,200 stereo adapters had been sold.1 Industry Uncertainpy Although FM stereo receiver sales were successful in some markets, receiver makers Were still reluctant to resume their 'boom' talk of the previous spring. In early January, 1962, an RCA spokesman commented: ”We feel that it is a good talking point for radio salesmen, but frankly we don't know what it's going to mean in terms of sales." A Motorola sales manager added: "No one really knows whether its going to be a big bonanza or a very small one. We're inclined to think stereo sales will grow rather slowly." While nearly a dozen electronics manufacturers were producing FM stereo re— ceivers by 1962, well over 100 other radio manufacturers were not. The president of one of the smaller manufacturers, Mr. F. A. D. Andrea, stated that his company was holding back be— cause: "It is only a slight improvement over ordinary radio. You have to listen very closely to tell the difference."2 However, another of the smaller firms, Emerson Radio and Phonograph, became convinced that stereo radios were a coming consumer item and did go into the stereo receiver business. The company's advertising manager, Eugene Van Cive commented: "We do believe it's a mass market product and that FM 1D. A. Loewing, "New Sound of Music," Barrons, LII (January 8, 1962), p. 16. 2Ibid., p. 3. 65 generally is going to be a bigger and bigger factor in radio."1 Among the smaller manufacturers, Avery Fisher, president of the Fisher Radio Corporation, was the most en- thusiastic over FM stereo's first six months: "We will have the best fourth quarter in our history, thanks largely to FM stereo.”2 Listener Popularity Just how popular was FM stereo by January 1962? Al- though the exact number of FM stereo receivers sold in the United States has never been determined, the December 6, 1961 issue of the Wall Street Journal reported that 50,000 stereo receivers had been sold in the first six months of stereo broadcasting.3 Barrons, a national business and financial trade publication, offered an even more optimistic sales picture. In its January 8, 1962 issue, the publi- cation estimated that from June 1, 1961 to January 8, 1962, anywhere from 50 to 100 thousand stereo receivers had been purchased in the U.S.4 The EIA's Consumer Products Division later reported that during the mongh of January 1962, re- ceiver manufacturers had produced 18,000 FM stereo sets. As lIs Multiplex Radio Ready to Explode?" pp. cit., p. 14. 2Wall Street Journal, December 6, 1961, p. 1. 3Ibid., p. l. 4Loewing,.pp. cit., p. 16. 66 more stations turned to stereo, set production increased. By December 1962, L. M. Sandwick, the staff director of the EIA's Consumer Products Division, reported that manufacturers were producing 70,000 sets a month. This rapid pace con- tinued into 1963 with producers reporting another 70,000 sets assembled during April. In a report to the NAB in early April, 1963, Sandwick stated that more than 750,000 stereo units had been sold since the fall of 1961. He went on to predict that in 1963 sales would hit one million units for the first time; an increase of 233,000 receivers over the previous year. Sandwick stated that because of a disclosure problem his figures excluded table models and hi-fi 1 components. Pulse Survey of Sets As can be inferred from the above figures, reports as to the number of FM stereo receivers either manufactured or sold in the United States have been in general figures only. One of the most detailed estimates of set sales was contained in a ten market composite study of AM, FM, and TV conducted by The Pulse Incorporated for the N.A.F.M.B. The pulse survey, conducted from November, 1963 through February, 1964, was published on April 13, 1964. The ten FM markets surveyed were Boston, Chicago, Cleveland, Detroit, Los 1"Giant Strides Ahead for FM?” Broadcasting, LXIV (April 8, 1963), PP. 92-4. 67 Angeles, New York, Philadelphia, Pittsburgh, San Francisco, and Washington. A total of 1893 completed interviews were used for the analysis. The survey reported that 805 of the homes interviewed (42.5%) had at least one FM receiver. Of these 805 homes, 203 (34.0%) reported that at least one of their sets could receive FM in stereo. Another 10.5% replied that they did not know if their sets could receive stereo. If this survey is a representative sample, There would then be approximately 3,379,000 stereo receivers located within these ten markets (estimated by Pulse to contain 23,464,800 homes). This figure, much larger than the estimate given by Sandwick, is probably a more accurate picture since the survey counted all stereo receivers including the table models, adapters, and foreign models that Sandwick's figures did not include. If there were approximately 3,400,000 located in these ten markets alone, it is obvious that there was a considerably greater number spread throughout the country. The Pulse survey also seemed to bear out the pre- dictions of those electronics manufacturers who believed that there would only be a limited market for FM stereo adapters. Of the 273 stereo FM homes, the vast majority, 94.9%, reported that they had purchased their FM stereo re- ceiver new. Only 2.9% reported that they had converted their phonograph or monaural FM radio in order to receive FM stereo. 68 Expected FM Radio Purchases When the ngnpppp without a stereo receiver were asked if they planned to purchase a stereo receiver within the next year, only 4.0% stated that they definitely would. While another 14.3% answered that they "maybe will," the overwhelming majority, 81.7% replied that they definitely would not purchase a stereo receiver. However, the picture was somewhat brighter in non-FM homes. When the 1088 non-FM homes were asked if they planned to purchase an FM radio with- in the next year, 21.2% answered that they either "might" or definitely would" purchase an FM receiver. Of these 230 homes that answered positively, 47.4% stated that their pur- chase would be an FM stereo radio. Another 18.3% either didn't know or couldn't give an answer. Thus in this ten market area, at least half of the people planning on pur- chasing an FM receiver were planning on making that receiver an FM stereo radio.1 By July, 1963, the word 'boom' was again being heard in the comments of national FM officials. "I believe over 50 million FM receivers will be sold within the next five or six years, and that the largest portion will have FM stereo capabilities," stated the president of the N.A.FM.B., James Schulke. Schulke, however, qualified his Statement: "This will happen if manufacturers truly 1The Pulse Inc., "10 Market Composite Three Media Study,” April 13, 1964, pp. 11-12. 69 recognize this market and do the merchandising, promotion, and advertising job necessary to exploit its potential.1 Patent Conflict Continues While the sale of FM stereo receivers has improved through the years, the patent conflict surrounding FM stereo has not. Shortly after Crosby-Teletronics filed its patent infringement suit against GE in the fall of 1961, it was forced to file a petition of bankruptcy under Chapter 11 of the Bankruptcy Act. Subsequently, the Trustee in Bank— ruptcy for the company had the suit dismissed without preju- dice because it lacked sufficient funds to prosecute the suit. On February 25, 1964, the United States Patent Office granted GE a patent covering the " . . . stereophonic FM broadcasting system adopted in 1961 as the U.S. standard and now in nationwide use."2 The patent, #3,122,610, was issued specifically to Antal Csicsatka, a Hungarian refugee who worked for GE's radio receiver department in Utica, New York. The patent covers home receivers, receiver kits, broadcast transmitters, and certain service equipment. GE immediately announced royalty rates of 50 cents per receiver, $50 per transmitter, and $1.00 for service equipment. 1"And Now PM Will Have the Numbers Too," Broadcasting, LXV (July 29, 1963), p. 53. 2General Electric Company, Press Release, February 26, 1964. 70 Although the U.S. Patent Office may have been satis— fied with the validity of GE's patent claims, the Trustee for Crosby-Teletronics was not. Because a dismissal without prejudice permits the plaintiff to refile the law suit at a later date, the Trustee in Bankruptcy refiled the patent in— fringement suit against G.E. late in the summer of 1964. Since the Federal District Court for the Southern District of New York has been extremely busy, General Electric ex- pects that it may " . . . literally be a matter of two or three years before there is any decision, if the matter goes to trial."1 BROADCASTING "The benefits of stereo are not readily distinguish— able to the untrained ear unless the station is broadcasting the sounds of a ping—pong game."2 " . . . stereo, we feel, is as superior to monaural transmissions as is a Rolls Royce to the horse and buggy."3 " . . . advertising has gone up considerably since the station went into FM stereo."4 lL. Mason Harter (G.E. Counsel), Syracuse, letter, November 18, 1964, to the author. 2Loehwing,pp. cit., p. 16. 3"Engineers Can See FM Stereo Improving," Broad— casting, LXIII (October 22, 1962), p. 88. 4"FM Stereo: How it Looks to Dealers and Broad- casters in Ten Key Cities," Electrical Merchandising Week, XCIV (September 12, 1962), p. 12. 71 "Stereo is a big waste of money and time and we may take it off our broadcasting schedule."l "Some receivers have a tiny light which glows when the set is playing stereo so the owner will know he is getting his money's worth."2 "Stereo, I think, is worthwhile, because any im— provement in listening quality gives us more pleasure."3 Thus the argument has continued. Broadcasters, advertisers, and critics have all expressed opinions about the value and the future of FM stereo. But while the argu- ments over the value of FM stereo have continued, so has its growth. On June 1, 1961, three stations began broadcasting in stereo. By the end of that year, there were 51. A year later, 183 stations were on the air in stereo. Another 60 stations began stereocasting in 1963, and the first official FCC report, issued on August 31, 1964, stated that there were 279 stations broadcasting in stereo. Although FM stereo has contunually grown'both in number and as a percent of the total number of FM stations, it has not expanded as fast as most experts had hoped. On September 7, 1961, the New York Times reported that between 80 and 100 stations were expected to be broadcasting in 1Ibid., p. 9. 2A. Bester, "New Age of Radio," Holiday, XXXIII (June, 1963), pp. 56-65. 3Joel Tall, "Quality Standards for Broadcasters," Saturdny Review, XLIV (June 24, 1961), p. 33. 72 stereo before the end of the year. By October, 1961, the N.A.B. had become a little less optimistic. It predicted that 79 stations would be broadcasting in stereo by the end of 1961. The most optimistic prediction was made by L. M. Sandwick in April, 1963, when he stated that there would be 300 FM stereo stations by the end of that year; a number yet to be reached in the middle of 1964. The only prediction that underestimated the number of FM stereo stations was made by Printers Ink in February, 1962. The articles suggested that: " . . . there could well be over 100 [FM stereo 1 stations] by the end of 1962." In reality, there were almost twice that number on the air by the end of the year. TABLE 1 GROWTH OF FM STEREO Number of Number of FM Stereo as % Date FM stations stereo stations of Industry June 1, 1961 871a 3b 0.34% Jan. 1, 1962 960 51 5.31% Jan. 1, 1963 1081 183 16.93% Jan. 1, 1964 1146 243 21.20% Aug. 31, 1964 1202a 279 23.21% aEstimates published by Broadcasting magazine; all otluer station numbers are official figures issued by the Fe