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NBC

Overview

This page deals with the US NBC network and NBC-Universal media group.


It covers -

  • introduction
  • NBC in radio
  • NBC in television
  • the media-industrial complex?
  • studies

RCA, RKO and General Electric are examined in supplementary notes.

Introduction

NBC - now the centrepiece of NBC Universal - embodies the history of US commercial broadcasting and what critics have characterised as the media-industrial complex. It is currently controlled by the sprawling engineering and financial services conglomerate General Electric (GE).

It was spawned by RCA, created by General Electric and Westinghouse during the 1920s 'radio boom' that was a precursor of the dot com fever at the end of the millennium. RCA expanded into film (through RKO) and boasted two major radio networks, one relinquished under federal government pressure to form what became ABC. RCA followed a similar trajectory to GE and Westinghouse, becoming an increasingly unwieldy conglomerate.

In the early 1980s three networks - ABC, CBS and NBC - accounted for around 92% of US television viewers. AT&T ('Ma Bell') controlled 78% of local telephone service and around 98% of the long distance market. IBM accounted for 77% of the computer market. How the world has changed, and not just because of the web.

RCA, having fended off Disney, was absorbed by GE in 1985 to gain NBC - an operation at once more exciting and potentially lucrative than bashing metal. In 2003 GE formed a joint venture - NBC Universal - that encompassed the US film studio, theme park and cable tv interests of Vivendi Universal. At that time GE had revenue of around US$135 billion and assets of US$575bn, with around 315,000 employees in over 100 nations. It ranked as the 5th largest US company by sales and the 8th largest in the world.

A chronology of NBC, RCA, RKO and GE is here.

NBC in radio

NBC was formed by Radio Corporation of America (RCA) in 1926 after parents GE and Westinghouse decided that electronics manufacturer could maximise profits by producing the content, the broadcasts, the transmitters and the receivers. Sounds like Microsoft circa 1998.

RCA had been formed in 1919 to control the US patents of GE, AT&T, Westinghouse and United Fruit (later Lindner-controlled Chiquita Brands). AT&T involvement reflected investment by the dominant US telephone and telegraph network in research, principally through Bell Laboratories and centred on long-distance messaging. United Fruit - sometimes derided as El Pulpo and the very model of yankee corporate imperialism - held key patents as part of communications with its operations in Latin America and the Pacific.

Under the leadership of David Sarnoff, whose talent as an organiser matched that of self-promotion, RCA initially accumulated radio broadcasting stations (in parallel with Westinghouse and AT&T) and then built a network.

That network, subsequently expanded and split for convenience into two arms - the so-called Red and Blue Networks - offered advantages for advertisers through block bookings across all major markets and economies of scale in programme production. AT&T sold its stations in addressing federal competition concerns, which had seen the emergence of IT&T as a competitor equipped with manufacturing operations (eg the UK Standard Electric and German Lorenz) that sought to rival Western Electric.

GE and Westinghouse were forced to divest RCA (and thus NBC) in 1932. As a standalone entity RCA encompassed consumer electronics manufacturing, a stake in the film industry through RKO (initially to protect its position after early 'talkies' used Western Electric technology), phonograph and record production, and the dominant US radio networks.

That dominance raised concerns in government (notably the Federal Trade Commission, Federal Communications Commission and Department of Justice). Perhaps more importantly, given the weakness of early US broadcast regulators under Harding and Coolidge, it raised concerns among advertisers. RCA had assimilated the American Broadcasting Company, based in Seattle, formed in 1927 but stricken by the 1929 Wall Street Crash, with some stations being absorbed by NBC's short-lived 'Brown Network'.

Aggregate revenue for US broadcasters reached US$200 million pa in 1940. During the following year the Federal Communication Commission, seeking to increase competition, ordered NBC to spin off one of its networks. That decision was upheld by the Supreme Court in 1943.

As a result, RCA's Blue - which scored lower ratings and often featured lower-powered stations - was spun off, with a controlling stake being taken by manufacturer Edward Noble for around US$8 million. It became the American Broadcasting Company (ABC), subsequently acquired by Disney.

NBC in television

NBC had meanwhile started commercial television broadcasting on an experimental basis, along with competitors such as DuMont and Westinghouse.

Growth of its television operations during the second half of the 1940s and the early 1950s was fuelled by RCA's hardware sales and revenue from the NBC radio network. By the mid-50s NBC was estasblished as the premier US television network - with a position comparable to Packer's Nine in Australia - a dominance that it enjoyed for much of the following fifty years. Radio occupied a back seat. RCA had sold control of RKO to the eccentric Howard Hughes

As an electronics manufacturer and owner of the dominant recording group it enjoyed the luxury of an increasingly problematical diversification that encompassed frozen foods, book publishing, property, financial services and Hertz car rentals. That conglomeration reflected the growth of Kinney (later Warner Communications), Westinghouse and CBS (subsequently absorbed by the Loews cigarette to insurance group). Disney made an unsuccessful bid for NBC in 1985.

The media-industrial complex

In 1986 RCA was swallowed by GE, a move apparently driven by the desire to gain control of NBC. RCA-Victor (RCA's music arm) was accordingly sold to Bertelsmann and GE accelerated disposal of other RCA assets. During 1988 the NBC radio stations were sold to Infinity, Westwood and Westinghouse's Group W. Expansion of GE's own operations - highlighted on later pages of this profile - continued apace.

During 1999 NBC took a 32% stake in the Paxson group, operator of the 'seventh' television network.

In 2003, as part of the dismantling of the Vivendi Universal conglomerate (described in more detail in a separate profile on this site), GE formed NBC Universal: 80% owned by GE, 20% by Vivendi. The expectation is that Vivendi will ultimately dispose of its interest. The joint venture encompasses Vivendi's US film interests (eg Universal Studios production and distribution units), five theme parks, and cable television channels such as the USA Network and Sci-Fi Channel.

An indication of NBC-Universal and other elements of GE is here.

Studies

The early history of NBC - encompassing what has been characterised as the golden ages of US radio and television - reflected regulatory constraints and the vision of RCA executive David Sarnoff - a strange mix of technocrat, tireless self-promoter and cash register. Kenneth Bilby's The General: David Sarnoff and the Rise of the Communications Industry (New York: Columbia Uni Press 1991) offers an introduction to Sarnoff's life and times.

It is more nuanced than Eugene Lyons' David Sarnoff (New York: Harper & Row 1966) and Carl Dreher's Sarnoff: An American Success (New York: Quadrangle 1977). Tom Lewis' Empire of the Air (New York, Harper Collins 1991) offers a wider picture. For inventor Philo Farnsworth see The Last Lone Inventor (New York HarperCollins 2002) by Evan Schwartz and The Boy Genius and the Mogul (New York: Broadway 2002) by Daniel Stashower.

David Halberstam's The Powers That Be (New York: Knopf 1979) is an intelligent picture of the Washington Post, CBS, NBC, New York Times and LA Times at the peak of the 'television age'.

Ken Auletta's Three Blind Mice: How The Television Networks Lost Their Way (New York: Random House 1991) gives a picture of 'old media in crisis' as the businesses and consumers first started to head onto the information highway. It is deeper and more original than the disappointing collection of profiles in his The Highwaymen - Warriors of the Information Superhighway (New York: Random House 1997).

For a view of life in front of the camera Gwenda Blair's breathless Almost Golden: Jessica Savitch & The Selling of Television News (New York: Simon & Schuster 1988), Robert Goldberg's Anchors: Brokaw, Jennings & the Evening News (New York: Carol 1990) and Herbert Gans's sprightly Deciding What's News: A Study of CBS Evening News, NBC Nightly News, Newsweek and Time (New York: Pantheon 1979)

Program executive Brandon Tartikoff's The Last Great Ride: NBC Television (New York: Random 1992) is self-celebratory but provides a view from inside the belly of the beast. Grant Tinker's Tinker In Television: From General Sarnoff To General Electric (New York: Simon & Schuster 1994) is less pacy, in contrast to Pat Weaver's The Best Seat in the House: The Golden Years of Radio and Television (New York: Knopf 1994).

For United Fruit see in particular Banana Wars: Power, Production and History in the Americas (Durham: Duke Uni Press 2003) edited by Steve Striffler & Mark Moberg, Tropical Enterprise: The Standard Fruit & Steamship Company in Latin America (Baton Rouge: Louisiana State Uni Press 1978) by Thomas Karnes, The Banana Men: American Mercenaries & Entrepreneurs in Central America, 1880-1930 (Lexington: Uni of Kentucky Press 1995) by Lester Langley & Thomas Schoonover, Marcelo Bucheli's Bananas and Business: The United Fruit Company in Colombia, 1899-2000 (New York: New York Uni Press 2005) and The American Radio Industry and its Latin American Activities: 1900-1939 (Urbana: Uni of Illinois Press 1990) by James Schwoch. Other works are highlighted on the United Fruit historical site.

Works on AT&T are highlighted here.

Broader overviews of the US networks and broadcasting are highlighted here on the Caslon Analytics site.