In 1926, Radio Corp. of America formed the National Broadcasting Co. with its own New York flagship station, WJZ, and WEAF, which it acquired from AT&T, as the centerpiece stations behind a plan to form a national network of radio stations in which AT&T long-distance lines were the conduit from city to city. The Columbia Broadcasting System was established two years later, under the direction of cigar-company scion William S. Paley.
With a network system established, great economies of scale were realized for advertisers: A program produced in New York could reach millions of listeners across the nation at very little additional cost.
At first, stations and networks put together their own programming then sought a sponsor to provide support. By the mid-1930s, however, advertising agencies took over the production of radio programs. Programs of every type—including big-name variety shows, daytime serials, star-studded cinematic adaptations, comedy series, adventure serials and prime-time dramas—emanated from agencies' newly formed radio production departments.
Some of the largest agencies, such as J. Walter Thompson Co., Young & Rubicam and Blackett-Sample-Hummert, pioneered genres and techniques of production still used today. Agencies such as JWT, which produced the "Fleischmann's Yeast Hour," worked references to the sponsor's product directly into the show's scripts. One of radio's best-loved programs, the long-running "Jack Benny Program," produced by Y&R for General Foods' Jell-O Pudding and Grape Nuts, featured a plot that usually revolved around the production of a radio show.
Procter & Gamble Co. was the largest single sponsor of daytime programming, with the husband-and-wife team of Frank and Anne Hummert of Blackett-Sample-Hummert among the most prolific producers of daytime serials or soap operas.
By the late 1930s, advertising agencies moved much radio production to Hollywood to be closer to the film industry, with which radio producers increasingly exchanged stars, scripts and properties. Daytime serials and a few other programs, however, continued to be produced in New York and Chicago.
Radio networks in the U.S. established continuity acceptance departments in the late 1920s as a way of exerting some control over the material aired on their licensed outlets. But by the late 1930s, they found themselves in the frustrating position of acting as mere "time brokers" to increasingly headstrong clients and agencies eager to subvert, avoid or attack the networks' efforts to air tasteful programs.
Era of regulation
As the Depression decimated most American economic and social structures, radio networks grew more profitable than ever. Their success can be attributed in part to the Communications Act of 1934, which defeated a campaign to institute government subsidies for public service broadcasting in the U.S. and confirmed the dominance of commercial radio, leaving untouched its system of sponsor control.
The new Federal Communications Commission licensed and regulated broadcasting stations, but the networks themselves remained untouchable—except through their owned and operated stations—as they and their sponsors were protected under the First Amendment from government interference with radio content.
By the late 1930s, NBC was running two highly successful networks, the slightly more commercial Red and the slightly more upscale Blue, while CBS also had grown. Affiliate stations received payment from their network for providing "clearance" of certain hours of the day and night for the broadcasting of shows, which the network sold to its sponsors. That "station compensation" could amount to a sizable proportion of an affiliate's income. Stations programmed the remaining time themselves with either local or syndicated productions and sold these shows to local advertisers.
However, under the terms of their license agreements with the FCC, stations were also expected to serve the public by airing a certain number of unsponsored, "sustaining" programs, which were sold to the affiliates by the networks. That arrangement worked well until CBS developed into a powerhouse of programming. With NBC and CBS exerting their muscle to get their programming aired, sponsored programs grew to occupy most of radio's broadcasting schedules, and sustaining programming declined.
There were several challenges to the network dominance of radio in the 1930s and 1940s. Early regulation prescribed that radio function as a live medium, but by the mid-1930s the FCC had relaxed its restrictions on recorded or "transcribed" programs.
Smaller independent stations, however, came to depend on nationally syndicated recorded shows as well as "spot" advertising, both of which slowly also made inroads into the schedules of network affiliates.
In 1934, four powerful independent stations (WOR, Newark, N.J.; WLW, Cincinnati; WXYZ, Detroit; and WGN, Chicago) formed the Mutual Broadcasting System as an alternate source of network programming and an alternative outlet for advertisers that did not need or could not afford the complete distribution of the major networks. Mutual, which pooled programs produced by its member stations, eventually became a leader in syndication to smaller stations across the country.
In 1943, after an FCC investigation into the market power of the networks produced some government-mandated structural changes designed to increase competition, NBC transferred its Blue network to Lifesaver magnate Edward Noble, who used it to create the American Broadcasting Co. The FCC also forced NBC and CBS to loosen their tight holds over affiliate relations.
Despite these reforms, large advertisers and their agencies continued to produce the bulk of network programming. By 1945, five agencies provided 46% of CBS' income and 33% of ABC's.
World War II brought new challenges to advertising and to radio in the U.S. Radio, and advertising executives played key roles in the government's campaign to boost morale and spread wartime information and propaganda. Key among these efforts was the creation of the Armed Forces Radio Service, which sent transcribed programs (recorded on disc) to hundreds of temporary radio broadcasting stations in troop encampments around the world.
In many countries, the experience of hearing American jazz and other elements of American popular culture on radio for the first time inspired postwar efforts to liberalize public broadcasting systems. The most notably affected nation was Great Britain, where advertising was introduced on the new medium of TV in the mid-1950s.
On the American homefront, the wartime dominance of women both as talent and as audience swept a generation of female performers, many of them former supporting players in Hollywood, onto prime-time airwaves. Comedians such as Lucille Ball, Joan Davis, Eve Arden and Ann Sothern (along with many of their male counterparts) formed their own production companies and sold their own shows to sponsors and agencies.
Also during World War II, public interest in news brought radio a new role of national importance. Sponsored news programs became one of the most significant genres of the period, as networks began to establish international news organizations.
After the war, the nation's attention turned to TV. The new medium grew slowly, but by 1953, TV had clearly usurped many of the entertainment functions that radio once fulfilled in national life. As more and more programs, performers, producers and advertisers switched to TV, network radio struggled to survive.
Programming on the national radio networks dwindled to primarily musical and news shows. However, the number of radio stations on the air actually increased after the war, thanks to revised FCC regulations and an increased demand for lower-power stations. Radio became a local medium, featuring local tastes, recorded music and the talents of a new breed of local radio announcers called disc jockeys.
Decline of networks
When national organizations began to desert the AM band after World War II, stations had to build local audiences, which in postwar industrialized cities across the country included sizable African-American populations. Innovative DJs played rhythm-and-blues records for black audiences and, increasingly, white youth. Rock 'n' roll and soul music rose from this fertile ground, along with the segmented format radio.
One of the first formats to emerge was the "top 40," which translated a long-suppressed black musical tradition into a hybrid form that appealed to American teens of different races.
As advertisers continued to pursue the youth market with rock 'n' roll, parents and listeners with more mature preferences formed markets for different programming formats such as "beautiful music," country and western, middle-of-the-road and all-news. The proliferation of different lifestyle-related products forced stations to find new ways to monitor their increasingly segmented audiences for advertisers.
The Radio Advertising Bureau, formed in 1951 as the Broadcast Advertising Bureau (it changed its name in 1955), provided centralized marketing, research and promotional services to help stations survive in the segmented, localized era of format radio, and various forms of programming thrived.
Spanish-language radio developed into one of the fastest-growing segments of the market. New networks, such as the National Black Network and Sheridan Broadcasting, emerged and eventually developed the powerful urban contemporary format. The Spanish International Network emerged as one of a growing number of services oriented to the Latino market.
The process of segmented formatting was accelerated by the development of FM radio. FM had been developed in the 1930s and the FCC authorized limited FM transmission before World War II, but it was not until after the war that the regulatory agency expanded the FM band to attract station operators.
FM also evolved into the preferred setting for stations playing music formats other than rock 'n' roll. Many classical music FM stations such as WFMT in Chicago restricted the use of prerecorded commercials and prohibited the use of jingles as incompatible with the seriousness of their programming. At the same time, a variety of eclectic and "progressive" formats-including jazz, hard rock, folk, album-oriented rock, alternative, free-form and underground music-also found audiences on FM.
In 1970, the National Public Radio network was formed, bringing in-depth news programs and eclectic music and information to nonprofit stations, mostly on the FM band, across the country.
In the 1970s, trends in radio programming in the U.S. changed again. The rise of automated formats, the proliferation of syndicated programs and the sheer commercial success of radio in the TV age brought a new kind of national concentration to the industry.
Computerization allowed many stations to eliminate on-air personnel. As programming became automated, standardized and streamlined, station managers replaced local personalities hosting shows geared to local tastes with nationally syndicated shows of the top music in a particular category, which had been selected to reach a desired target audience.
A host of subformats bloomed within the broader categories. "Progressive" rock fragmented into such prepackaged formats as adult contemporary, soft rock, oldies, alternative, contemporary hits and disco. By the late 1970s, satellite distribution made automated formats even more ubiquitous. A split that had already developed between AM and FM widened: FM became almost exclusively the home of music stations, while AM featured nonmusic formats.
The trends that began in the 1970s continued into the 1980s and 1990s, although the later decades were also marked by many other major changes: Talk radio rose to unprecedented heights. National syndication and satellite technologies facilitated interaction between listeners and hosts on call-in shows using toll-free numbers, and the call-in talk show boasted popular new hosts, such as Larry King, and new audiences, including maturing baby boomers.
Advertisers welcomed the upscale, well-educated audiences attracted by the hosts of those shows, who increasingly moved from being local presences to become syndicated national personalities.
The popularity of talk radio helped reverse the declining fortunes of AM. In 1975, 61% of the U.S. audience tuned to the AM dial at some point in the day, but by 1989 that number declined to 26%; only 22 of the top 100 stations in the U.S. were AM stations, and most of those were in smaller markets. By 1992, however, AM listenership was again on the upswing.
A new generation of controversial "shock jocks" and their stylistic heirs began to emerge. Led by the flamboyant Howard Stern, the right-wing talk show host Rush Limbaugh and self-help specialists such as Dr. Laura Schlesinger, the talk show format spilled over onto FM and even onto TV.
Deregulation and consolidation
Deregulation of the broadcasting industry, which began in the 1980s, sparked a wave of mergers and consolidation in the radio industry. With the relaxation of government restrictions on the ownership of radio and TV stations, media companies merged in unprecedented numbers. Capital Cities Communications bought ABC radio and TV; United Stations purchased RKO Radio Networks; Westwood One, already one of the largest radio networks, purchased both MBS and the NBC radio network.
In 1988, the first American radio network, NBC, ceased to exist. In the biggest consolidation of all, Infinity Broadcasting purchased Unistar, itself the merged combination of Transtar and United Stations, in 1993. Then, Westinghouse, the new owner of CBS, swallowed Infinity in 1995.
The next year, growing media conglomerates, guided by the new concept of "synergy," successfully pressured the federal government to pass the Telecommunications Act of 1996, which contained several deregulatory provisions. Most notably, the law removed restrictions against a company owning multiple stations within a single market. In early 1999, the proposed merger of Chancellor Media, Clear Channel Communications and Capstar foreshadowed the single largest owner of radio stations in the world, with more than 488 stations across the U.S. Together, the four largest companies (Chancellor, CBS, ABC and Emmis) controlled more than 75% of the radio audience in the 10 largest U.S. metropolitan areas at the end of the 1990s.
Networking began to rise again in the 1990s. National syndicated networks of all descriptions emerged and spun off even more highly targeted formats. However, by the late 1990s, independent promoters paid by the record labels increasingly intervened in the selection of music on station playlists.
In the 1990s, stations could choose from a variety of network offerings. They might take the traditional route and subscribe to a comprehensive format or pick and choose from a variety of syndicated and networked news, sports, music, comedy and talk options. "Drive time" remained the most popular and highly rated radio time, but statistics showed that Americans listened to radio throughout the day, at home, in the car and at work, for a national average of three hours and 20 minutes per listener per week.