"House of Magic's" Radio

So complicated were the technicalities of the recent deals between Radio Corp. of America, General Motors Corp., General Electric Co., Westinghouse Electric & Manufacturing Co., that Radio's accountants were momentarily baffled, had to ask the Stock Exchange for permission to delay their report (TIME, June 16). The essence of these deals was that General Electric Co. and Westinghouse, previously manufacturing 60% and 40% of RCA's Radiolas on a cost plus 20% basis should turn over their patents and radio manufacturing plants to Radio, sell sets under their own names through their vast distribution systems (TIME, April 28).

Last week the fulfillment of these changes came when General Electric advertised that it had three models ready. Many pages of advertising, vast broadcasting programs, announced the new product of, as General Electric termed itself, "The House of Magic." The advertising hinted of a policy which is known to be fundamental with the "House of Magic." It puts its name upon no magic until it is sure the magic is good magic.*

While business conditions may make this venture seem untimely, the radio business is in a better position now than it has been for some time. Generally speaking, inventories are down, many old companies whose products became household words in a short time have been eliminated. Charles Freshman, Kolster, Brandes, Ware, Freed-Elsemann, Thompson, Bel-Canto, Sleeper, Themiodyne, are no longer names to be reckoned with. The industry has been concentrated into fewer, stronger hands, some of which are pioneer survivors. Old firms still strong include Atwater Kent, Philco, Grigsby-Grunow, Stromberg-Carlson, Crosley, Grebe, Andrea Inc., Gulbransen Co.

Although many sets have been sold, the saturation point remains almost theoretical. From 1922 until the present, the number of homes with receiving sets has grown steadily. Radio and Its Future says that of 28,000,000 homes, 60,000 had radios eight years ago, more than 10,000,000 have them at present. This compares to 18,000,000 homes with passenger automobiles, 13,000,000 with phonographs. Giving consideration to homes with obsolete sets, 22,000,000 more can be sold before every home has a radio. Some homes will have two radios; restaurants and hotels are markets; automobile installations are a new, big factor. On figures such as these Standard Statistics bases its conclusions that 1931 can easily be a year of record sales. And television may some day render every set out of date, give the industry a new start.

* When General Motors announced its Frigidaire, General Electric had already spent eight years of research on artificial refrigeration. Not until nine years later, in 1927, did it enter the field.

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