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Business Studies: Broadcasting and Its History

Radio and television have undergone seismic shifts in the way they produce content and make it available to viewers and listeners since the start of the 20th century. Streaming may have revolutionized the entertainment business, but everyone who binges their favorite television show via a streaming service or listens to music in their car thanks to an app on their phone is in the debt of the pioneers of the broadcasting business who first brought entertainment to the masses in their own homes and made their mark on the history of broadcasting.

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Business Studies: Broadcasting and Its History - Infographic

The Early 20th Century and the Beginning of Broadcast History

The person who first brought radio broadcasting to audiences in the United States was Reginald Fessenden, who first experimented with sending out broadcasts with music and vocals back in 1906. The Herrold School in San Jose, California, began experimenting with radio transmissions and call signs in 1909 under the guidance of Charles Herrold, and the Department of Commerce soon decided to regulate radio, a decision that led to radio stations having call letters.

The post-World War I era was a turning point in radio broadcasting history. During the war, only a select group of organizations were permitted to continue working on radio transmitters and receivers. Westinghouse made great strides during this time, and during the postwar era, many radio stations were founded, several of which were started by local newspapers. Pittsburgh's KDKA claims to have been the first fully functional radio station in the U.S., though this has been disputed.

Since stations quickly started accepting paying advertisers, the United States never imposed license fees for radios the way other countries did. The Radio Act of 1927 established the Federal Radio Commision, which a few years later was renamed the Federal Communications Commission, or FCC. The FCC continues to regulate and oversee broadcast stations and the content they air to this day.

Within a decade, by 1931, most households in the United States owned a radio. A few years later, in 1934, independent radio stations banded together for the first time to create a system for sharing syndicated content. The FCC then declared that NBC, which at the time was strictly a radio network, must sell its Blue Network division. The Supreme Court upheld this decision in 1943, stating that the scarcity of radio waves meant that the FCC was correct in taking action to prevent any one company from controlling too much of the spectrum. The Blue Network eventually became ABC. CBS was also operating as a radio broadcasting network by this point. Many of the radio networks were airing serialized soap operas in the afternoons. The first soap opera was created by a Chicago radio station in 1930. The genre earned its name because Procter & Gamble was a major sponsor of several shows, and in time, the company actually produced its own soap operas as well. Only one radio soap opera, Guiding Light, successfully transitioned from radio to broadcast television. In fact, Guiding Light aired on CBS until the fall of 2009 and was the last of the Procter & Gamble soap operas.

World War II, the Post-War Era, and the Arrival of Television: Another Milestone in Broadcasting History

During the 1930s, scientists and the broadcast industry started heavily experimenting with television. Much like World War I delayed radio for a few years, World War II slowed the progress of introducing television to the masses. But by 1946, ABC, CBS, NBC, and the DuMont network were all regularly broadcasting television content. DuMont stopped broadcasting during the 1950s; 30 years later, many former DuMont stations became the first stations of the Fox Network.

Radio was still going strong, though. During World War II, radio proved its value in being able to quickly transmit information to the entire country at the same time. For example, the attack on Pearl Harbor in 1941 was reported to the entire country nearly at the same time. Before radio, people would only learn about breaking news when their local newspaper put out its next edition. Radio soap operas and dramas, including familiar names like Perry Mason, were far more popular than anything offered on television, in large part because there was still so much more content on the radio and because far more households owned radios than televisions. In 1950, only 9% of households owned a television. But just four years later, in 1954, almost 56% of households had a television. By 1962, 90% of households owned a television. One reason television sales skyrocketed was the breakout popularity of network programs like I Love Lucy.

The 1950s saw the meteoric rise of television broadcasting and the related fall of radio broadcasting. The last network radio drama went off the air in 1962, the same year when television ownership hit 90% for the first time ever. The next great innovation in broadcasting occurred when CBS started broadcasting color television signals in 1951. However, another war, the Korean War, meant that progress in color broadcasting was paused until the conflict ceased. RCA started selling color television sets in 1954 after another color television broadcasting system was approved by the FCC in 1953. The Tournament of Roses Parade, which aired on Jan. 1, 1954, was the first coast-to-coast color television broadcast. However, the cost and complexity of filming and broadcasting shows in color meant that networks were slow to move to an all-color lineup. Several shows, like Gunsmoke, began airing in black and white despite the existence of newer technology. It wasn't until Gunsmoke's 12th season, which started airing in the fall of 1966, that the show moved to airing episodes in color. Daytime television was even slower to make the transition. For example, ABC's Dark Shadowspremiered in 1966 in black and white. It wasn't until 1967 that the soap switched to color, and it was the first ABC soap to do so. Other shows, however, began airing in color earlier. For instance, Bonanza, which premiered in 1959, was only ever filmed and aired in color.

Broadcast Supremacy and the Rise of Viewing Options

The final episode of the hit television show M.A.S.H. aired in 1983, and more than 100 million viewers tuned in to CBS to watch their favorite Korean War medics say goodbye; this would be the most-watched TV episode of all time. Twenty-one years later, Friends, which had been the defining sitcom of its era, only drew a little more than 52 million viewers. When the 21st-century sitcom phenomenon The Big Bang Theory aired its final episode in 2019, slightly less than 18 million viewers tuned in. What happened? Quite simply, the rise of options. M.A.S.H. aired during the infancy of cable television. Until that point, the only television content viewers had available was what was aired by the major networks and independent stations like Chicago's WGN and Atlanta's TBS. Cable meant that over the course of about a decade, people's choices exploded. That impacted the number of people viewing Friends. By the time The Big Bang Theory went off the air, cable and broadcast networks were also competing for viewers against streaming services like Netflix and Hulu. Radio also lost listeners as satellite radio put up stiff competition and then apps like Spotify and Apple Music began dominating the market.

The Business of Broadcasting

Broadcast networks depend on advertising dollars to fund their business. Shows with bigger audiences command more money for their advertising slots, and it's because of this that ratings for television and radio are carefully tracked. Sports, especially events like the Super Bowl, still draw large audiences and allow broadcasters to charge heavily for each commercial. However, recently, networks have turned to new streams of revenue, like product placement within shows and running their own subscription-based streaming apps to monetize their vaults of programming, in an effort to continue to be fiscally viable in a changing entertainment landscape.