When were the forms of media created? When did advertising first show up? Who owns the media?
Creation of the various forms of media
Newspapers & Magazines ~ 1880
Movies ~ 1910
Television ~ 1945
Cable Television ~ 1980’s
Satellite Television,History of the Media Articles Internet, Digital Communication ~ End of the 20th century
In 1920, radio was first developed, primarily for use by the military, strictly for sendingHistory of the Media – Old Radios messages from one location to another. David Sternoff, the then-president of RCA, first had the idea to sell radio sets to consumers, or what were then called radio receivers. However, consumers needed a reason to buy radios, so RCA was the first to set up radio stations all over the country. Between 1920 and 1922, 400 radio stations were set up, starting with KBKA in Pittsburgh. Stations were also set up by universities, newspapers, police departments, hotels, and labor unions.
By 1923, there were 600 radio stations across the United States, and $83 million worth of sets had been sold.
The biggest difference in radio before and after 1923 was that the first advertising was not heard on the radio until 1923. RCA at the time was made up of four companies:
United Fruit was one of the first global corporations, and one of the first to advertise on the radio. The AT&T division of RCA first thought about selling time on the air to companies, which marked the start of “toll broadcasting.” WEAF was the first station to operate this way, causing widespread outrage, and accusation of “polluting the airwaves.”
Because of this controversy, the practice of selling advertising time was called “trade name publicity.” Sponsors linked their name with a program on the air, rather than advertising a specific product in a 30 second “commercial” as we know it today.
Why did AT&T decide to experiment with charging companies for air time?
AT&T was not making any money from broadcasting at the time since they only made transmitters, not receivers. They only made money when new radio stations bought the equipment required to broadcast. They did not make money from consumers buying radios.
AT&T also started the practice of paying performers for their time on the air, rather than only volunteers, which was standard practice for radio content up until that point.
The first radio network
In 1926, RCA set up the first radio network, NBC. They decided it was more effective and efficient to produce shows in New York City, and then link the main radio station with stations all across the country, connected by AT&T (another RCA company) phone lines. (Now television networks are linked by satellite to their affiliates).
This was the beginning of the network affiliates system. The ideal network makes sure everyone in the country is capable of listening to their signal. NBC at the time had two philosophies:
Radio content was a “public service,” whose function was to sell radios.
Radio content was designed to generate income from advertising.
History of the Media In 1927, the second network was formed. It was CBS, started by William Paley. Paley was the first to think that networks could make money strictly from advertising, not even getting involved in the sales of radios. Like AT&T, CBS did not make radios. From the start, they made their money from selling advertising.
The rising of radio networks caused the Radio Act of 1927 to be passed, which established the FRC, or what is now known as the FCC, to allocate broadcast licenses. The need for such an organization was brought on by the fact that airwaves are limited resources, and broadcasting itself is a scarce public resource. By the 1930’s, the structure of radio have been set by the commercial format, although advertising never dominated radio like it would television later on.
In the 1920’s and ’30’s, radio programs were divided into two groups. Sponsored shows, which had advertisers, and unsponsored shows, which did not. The radio station paid for the unsponsored shows. The sponsored shows, on the other hand, were created entirely by the company sponsoring the show; advertisers were totally in charge of the radio station’s content. The content became advertising. Radio set the precedent for television, in that the same companies that controlled radio early on went on to control television.
Soon thereafter, television inherited the structure of radio. In the ’40’s, during the rise of television, RCA also held a monopoly on all television sets sold. By 1945-1955, advertising had taken over all of television. Television was organized around the premise of selling things. The entire television industry was creating a political atmosphere of suspicion and fear. Senator Joseph McCarthy, the founder of McCarthyism, which was based on the fear of Communism, and the HUAC (House Un-American Activities Committee, began to question people involved in television about their beliefs and associations.
What affected television in its early stages?
Politics (McCarthyism / HUAC).
Blacklists: From almost the inception of television, many writers, directors, and actors were considered to be pro-Communist and/or un-American.
Certain topics were totally off-limits at the time for television, particularly issues of race relations in the 1960’s. Overall, networks were not happy with the political situation for television in the 1960’s, both in terms of the blacklists, and of the fact that when every show had one sponsor, that sponsor controlled the entire program. Networks preferred to control the program, by way of moving to multiple sponsors/advertisers, where networks would retain control of the show, and advertisers would buy time in between the programming.
In the 1950’s, networks decided to eliminate the practice of sponsors controlling the shows with a move to spot selling, or advertisements between programs, as we know it today. What caused the move to spot selling?
1. Discovery of fraud in the quiz shows on television. Quiz shows were extremely popular at the time, and were liked by the networks, the sponsors, and the viewers alike. It turned out, however, that quiz shows were largely fixed. Charles Van Doren on “21” became a huge star due to his repeated wins, until it came out that the whole thing had been fixed. In the case of “The $64,000 Question,” the owner of Revlon was personally hand-selecting the winners and losers on the show.
2. It was becoming financially difficult for just one advertiser to support an entire show.
Around this same time came the inception of ratings to measure a show’s popularity. Ratings, quite simply, measure the number of people watching a show. To understand why ratings are so important, it’s crucial to understand how the television industry works, through three questions, and their respective answers:
1. Who owns television? [The networks]
2. What is sold on television? [Viewer’s time, not television shows]
3. Who are the customers of television? [Advertisers, not viewers]
This might be a counterintuitive concept for some. The networks, which own television, areHistory of the Media – Old Television the buyers of shows, not the sellers. On the other hand, they sell our eyeballs, so to speak, to advertisers. Networks want the maximum possible profit from buying and selling time, both viewers’ time, and advertisers’ time.
The primary measure of television ratings, which determine the price of that time being bought and sold, is AC Nielsen, an independent company which provides information as to who watches what on television. Currently, about 4,000 households are used to represent the national viewing of television. In the 1980’s, only 1,200 households were used. Some households have an electronic device installed on their television which tracks what they watch, while others keep a diary of viewing habits.
There are two measures for determining a show’s audience. One is the rating, and the other is the share.
Rating: Percentage of total homes with televisions tuned into a particular show.
Share: Percentage of those watching television at a particular time who are tuned into a particular show.
The share is always greater than the rating. Ratings are more important for advertisers, and share is more important to the networks.
Total households with televisions: 150 million
Total households watching television at 8pm on Monday nights: 90 million
Total households watching American Idol at 8pm on Monday nights: 45 million
Therefore: Rating: 30, Share: 50
It’s important to note how many factors can skew the results. Shows cost producers much more than the networks typically pay them for those shows. The way for producers to make money is by getting the networks to renew the show, in order to have a shot at making money from syndication on other channels, also knows as reruns. That is the case when individual stations (say for example, the Miami affiliate of ABC wants to carry Seinfeld), buy the rights to a show from the producers of that show. Shows that last only one season, for the most part, lose millions of dollars. One of the most important factors in whether shows will be renewed or not is their rating.
This brings us to how ratings can be skewed. For example, if a show has a 20 share, and it needs a 25 share to be renewed for another season, what might the producers do? In principle, they need to convince another 5% of the people watching television when their show is on to watch their show; this is no simple task, as that involves convincing millions of people. However, since the ratings are based on those 4,000 Nielsen households, that means that they could convince just 200 Nielsen households to watch their show, which would increase the share from 20 to 25. This is why Nielsen households must be kept totally secret from the networks. When the Nielsen households have leaked to the networks, one way which they got people to watch their show was by offering viewers a small sum of money for filling out a survey about a commercial which they were told would play only during a particular show. Since they had to watch that channel while their show was on, this would boost the share.
Once ratings are determined, advertising prices are set by two factors:
The size of the audience.
The demographics (income, age, gender, occupation, etc) of the audience.
In short, the job of television programs is