NATIONAL BROADCASTING COMPANY
The fortunes of the National Broadcasting Company (NBC) have always been closely tied to those of its parent company, Radio Corporation of America (RCA). Unlike CBS, which was formed as an independent programming enterprise, NBC came into existence as the subsidiary of an electronics manufacturer which saw programming as a form of marketing, an enticement to purchase radio and television receivers for the home. The power and influence of a national network aided RCA as it lobbied to see its technology adopted as the industry standard, particularly during the early years of television and in the battle over color television.
RCA was formed after World War I when General Electric signed an extensive patents cross-licensing agreement with Westinghouse, AT and T, and United Fruit. The product of this alliance, RCA was owned jointly by the four companies and was created for the purpose of marketing radio receivers produced by G. E. and Westinghouse. As the alliance unraveled during the late 1920s and early 1930s, due to internal competition and government antitrust efforts, RCA emerged as an independent company. In November 1926, RCA formed NBC as a wholly-owned subsidiary. Shortly thereafter, RCA added a second network, and the two networks were designated NBC-Red and NBC-Blue.
RCA, which had been merely a sales agent for the other companies emerged in the 1930s as a radio manufacturer with two networks, a powerful lineup of clear channel stations, and a roster of stars who were unequaled in the radio industry. From this position of power RCA research labs under the direction of Vladimir Zworykin set the standard for research into the nascent technology of television. NBC began experimental broadcasts from New York's Empire State building as early as 1932. By 1935 the company was spending millions of dollars annually to fund television research. Profits from the lucrative NBC radio networks were routinely channeled into television research. In 1939 NBC became the first network to introduce regular television broadcasts with its inaugural telecast of the opening day ceremonies at the New York World's Fair of 1939. RCA's goal was to produce and market receivers and programs, to become the driving force in the emerging industry.
RCA's dominance of the broadcast industry led to government scrutiny in the late 1930s when the FCC began to investigate the legitimacy of networks, or "chain broadcasting" as it was then called. The result was the 1941 publication of the FCC's Report on Chain Broadcasting which criticized the network's control of a majority of high-powered stations and called for the divorcement of NBC's two networks. RCA took the decision to court, but failed to overturn the FCC's findings. In 1943 RCA sold its Blue network to Edward J. Noble, and this network eventually became ABC.
After World War II, RCA moved quickly to consolidate its influence over the television industry. While CBS tried to stall efforts to establish technological standards in order to promote its own color-TV technology, RCA pushed hard for the development of television according to the existing NTSC technical standards established in 1941. The FCC agreed with RCA, though the two networks continued to battle over standards for color television until the RCA system was finally selected in 1953. Throughout this period, network television played a secondary role at RCA. In the early 1950s NBC accounted for only one-quarter of RCA's corporate profits. NBC's most important role for its parent was in helping to extend the general appeal of television as the market for television sets boomed.
Throughout the 1950s and 1960s, NBC generally finished in second place in the ratings behind CBS. NBC's prime-time schedule relied heavily on two genres: drama, including several of the most acclaimed anthology drama series of the 1950s (Philco/Goodyear Playhouse, Kraft Television Theater), and comedy-variety, featuring such stars as Milton Berle, Jimmy Durante, Sid Caesar and Imogene Coca, Dean Martin and Jerry Lewis, Bob Hope, and Perry Como. In spite of its dependence on these familiar genres, NBC was also responsible for several programming innovations.
Several key innovations are credited to Sylvester "Pat" Weaver, who served as the network's chief programmer from 1949 to 1953 and as president from 1953 to 1955. Weaver is credited with introducing the "magazine concept" of television advertising, in which advertisers no longer sponsored an entire series, but paid to have their ads placed within a program–as ads appear in a magazine. Previously, networks had functioned as conduits for sponsor-produced programming; this move shifted the balance of power toward the networks, which were able to exert more control over programming. Weaver expanded the network schedule into the "fringe" time periods of early morning and late night by introducing Today and Tonight. He also championed "event" programming that broke the routines of regularly-scheduled series with expensive, one-shot broadcasts, which he called "spectaculars." Broadcast live, the Broadway production of Peter Pan drew a record audience of 65 million viewers.
Former ABC president Robert Kintner took over programming at in 1956 and served as network president from 1958 to 1965. Kintner supervised the expansion of NBC news, the shift to color broadcasting (completed in 1965), and the network's diversification beyond television programming. Through RCA, NBC branched out during the 1960s, acquiring financial interest in Hertz rental cars, a carpet manufacturer, and real-estate holdings. The network moved aggressively into international markets, selling programs overseas through its NBC International subsidiary, which placed NBC programs in more than eighty countries. By the mid-1960s NBC had invested in thirteen television stations and one network in eight countries.
Programming under Kintner followed the network's traditional reliance on dramas and comedy-variety. NBC formed a strong alliance with the production company MCA-Universal, whose drama series came to dominate the network's schedule well into the 1970s. After introducing movies to prime-time with Saturday Night at the Movies in 1961, NBC joined with MCA-Universal to develop several long-form program formats, including the ninety-minute episodic series (The Virginian), the made-for-TV movie (debuting with Fame Is The Name of the Game in 1966), and the movie series (The NBC Mystery Movie, which initially featured Columbo, McCloud, and McMillan and Wife).
During the late 1970s, after decades of battling CBS in the ratings, NBC watched as ABC, with a sitcom-laden schedule, took command of the ratings race, leaving NBC in a distant third place. To halt its steep decline, NBC recruited Fred Silverman, the man who had engineered ABC's rapid rise. Silverman's tenure as president of NBC lasted from 1978 to 1981 and is probably the lowest point in the history of the network. Instead of turning around NBC's fortunes, Silverman presided over an era of steadily declining viewers, affiliate desertions, and programs that were often mediocre (BJ and the Bear) and occasionally disastrous (Supertrain).
At the depths of its fortunes in 1981, mired in third place, NBC recruited Grant Tinker to become NBC chairman. A cofounder of MTM Enterprises, Tinker had presided over the spectacular rise of the independent production company that had produced The Mary Tyler Moore Show, Lou Grant, and Hill Street Blues. Tinker led NBC on a three-year journey back to respectability by continuing the commitment to quality programming that had marked his tenure at MTM. Along with his chief programmer, Brandon Tartikoff, Tinker patiently nurtured such acclaimed series as Hill Street Blues, Cheers, St. Elsewhere, and Family Ties. The turning point for NBC came in 1984 when Tartikoff convinced comedian Bill Cosby to return to series television with The Cosby Show. Network profits under Tinker climbed from $48 million in his first year to $333 million in 1985.
By the mid-1980s NBC generated 43% of RCA's $570 million in earnings–a hugely disproportionate share of the profits for a single division of the conglomerate. In the mergermania of the 1980s, RCA became a ripe target for takeover, particularly given the potential value of the company when broken into its various components. General Electric purchased RCA–and with it NBC–in 1985 for $6.3 billion. When Tinker stepped down in 1986, G.E. chairman John F. Welch, Jr. named former G.E. executive Robert E. Wright as network chairman. Based on the continued success of the series left behind by Tinker, NBC dominated the ratings until the late 1980s–when its ratings and profits suddenly collapsed, leaving losses of $60 million in 1991 and just one show, Cheers, in the Nielsen top 10.
Rumors warned that G.E. was about to bail out, selling NBC to Paramount, Time Warner, Disney, or perhaps even a syndicate headed by Bill Cosby. G.E. management came under intense criticism for its sometimes harsh cost-cutting, which many felt had damaged network operations, particularly in the news division. G.E. was also blamed for misunderstanding the business of broadcasting. The network suffered a series of public relations debacles, including a fraudulent news report on the newsmagazine Dateline and the bungled attempts to name a successor to Johnny Carson as host of the flagship Tonight Show.
But General Electric held onto NBC, and Robert Wright remained in charge. By 1996 NBC is once again the undisputed leader of network television with the five top-rated shows most weeks. Under the programming of Warren Littlefield, NBC has solid hits in Seinfeld, E.R., Frasier, and Friends. G.E. has also spent a considerable amount of its own money to guarantee NBC the rights to the most valuable televised sports events, including $4 billion for the rights to broadcast the Olympics until well into the twenty-first century. In addition, NBC has diversified substantially during the G.E. era. The network owns minor stakes in cable channels such as Arts and Entertainment, Court TV, American Movie Classics, Bravo, Sports Channel America, and the History Channel. NBC founded a cable network, CNBC, a business-news channel which is valued at more than $1 billion. From this success it has spun off the cable network America's Talking, which will be converted to an all-news channel thanks to an alliance formed with computer software giant Microsoft. And the network has invested $23 million in a Europe-based cable and satellite network called Super Channel, which will extend NBC's global reach.