Radio Broadcasting, Station Programming And
Susan Eastman and her colleagues (1997) state very clearly that the business of broadcasting is "the business of creating audiences that advertisers want to reach" (p. 8). This focus originated in the 1920s when WEAF, a radio station owned by the American Telephone and Telegraph Company (AT&T), began "toll broadcasting" (i.e., the exchange of money for airtime). This led to sponsorshipsof blocks of programs, such as the "Palmolive Hour" and the "Mercury Theater." It was not long before sponsorships progressed to shorter, more frequent announcements.
Radio advertising became even more attractive with the rise of networks. AT&T initiated this trend by linking its stations by using its existing telephone infrastructure. The telephone company soon left the broadcasting industry, selling its holdings to the Radio Corporation of America (RCA). As a result, RCA created a new company, the National Broadcasting Company (NBC), which operated radio stations under a "Blue" network that included former RCA, Westinghouse, and General Electric holdings and a "Red" network that included mostly former AT&T stations. These networks increased the audience for the network programming and thereby increased the advertising revenue. The "golden age" of radio, from around 1930 to 1948, saw the culmination of David Sarnoff's dream of radio being the center of entertainment in American households.
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