Ripples of Color
Running their assembly lines overtime, the 20 U.S. manufacturers of color TV are in the midst of a boom of major proportions. By year's end they will have sold 2,500,000 sets worth $1.4 billion, an 80% increase over last year. In seeking to meet this heavy demand, the $2.5 billion color TV industry is sending ripples of profits out to a host of satellite industries that provide it with cabinets, tubes, electronic components, dials, glass, antennas, even rare earth.
From Wood to Yttrium. Among the most pressed are companies in the normally placid furniture industry, which has profited by a substantial return to wooden cabinets for color TV. Many companies have doubled or tripled production, are busy turning out decorator cabinets that can run the cost of a TV set (average: $550) up to $1,600. Both Miller TV Products Co. of High Point, N.C. (which supplies RCA and Motorola), and Drexel Furniture (which supplies Motorola) have greatly stepped up production to meet demand. Small Muntz TV Inc. recently bought into a Michigan cabinetmaker in order to protect its supply, and other TV makers are looking over cabinetmakers with an acquisitive eye. The increased TV work, meanwhile, has produced an unanticipated shortage of wood for hi-fi sets, pianos and organs.
The need for complicated electronic parts has given a new boost to the electronics industry. Advance Ross Electronics of Chicago, which makes the deflection yokes and transformers for most manufacturers, has increased its sales in two years from $5.8 to $12 million. MSL Industries of Chicago, which produces both tube fasteners and plastic injection-molded cabinets (with which it hopes to fight wood's new inroads), is spending $8,000,000 to double its capacity, will hire 300 new workers. Corning Glass, the supplier of 90% of all the basic glass "bulbs" for color tubes, recently opened a third plant in Indiana to satisfy its customers' appeals for more tubes. Such producers of rare earth as Molybdenum Corp., American Potash & Chemical and Ronson, which supply the metallic elements europium and yttrium for the coatings that brighten color TV tubes, are rushing out orders at $1,000 per pound.
High Cost. Color TV is also having its impact on advertisers. Before year's end, 60% of all commercials made will be in color. Once committed, advertisers find that color costs about 30% more (up to $35,000 for a one-minute message), takes twice as long to make and often creates difficulties in the reproduction of a product's true tone and appearance. One agency rejected a commercial twelve times before its client was satisfied with the color; some packages, including Post Cereals and the Kroger Co.'s private labels, have had to be redesigned to appear more colorful.
Not surprisingly, the glow has spread to Wall Street. Shares in a formerly obscure company named National Video Corp. jumped from 97 1/8 to 111 1/2 in a single day after National announced it was doubling production of color TV tubes to 1,000,000 a year. Last week both Texas Instruments and Polaroid hit new highs on news that they were working together to produce a new, less expensive color tube--even though it may be years before the tube can be marketed. Even TV repairmen are acting bullish again. Reason: color sets are more complicated to keep in order than black and white. Aware of the boom elsewhere, some TV repairmen now charge $8 for a color call v. $5 for attending a sick black and white set.
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