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overview
This
page deals with the US NBC network and NBC-Universal media
group.
It covers -
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.
In 2007 NBC Universal announced that it would buy private
equity group Sparrowhawk Holdings, owner of the international
operations of the Hallmark Channel, in a deal estimated
at around £174m.
Sparrowhawk had purchased the Hallmark international division
in 2005 for around £121m. It also owns other channels
such as children's outlet Kids Co, women's channel Diva
TV and Movies 24.
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) and the excellent NBC: America's
Network (Berkeley: Uni of California Press 2007)
edited by Michele Hilmes offer 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.
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page (NBC holdings)
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