National Broadcasting Company Is Founded Summary

  • Last updated on November 10, 2022

With the founding of the National Broadcasting Company in 1926, the first permanent radio network was created.

Summary of Event

The successful use of radio by the U.S. Navy in World War I and an emerging view that the national interest of the United States required the development of this new technology by strictly American hands led to the formation of the Radio Corporation of America (RCA) in 1919. The new company, formed by a combination of the industrial giants General Electric General Electric Company (GE), American Telephone and Telegraph American Telephone and Telegraph (AT&T), Western Electric, Western Electric Manufacturing Company and Westinghouse, Westinghouse was not without its problems. Patent conflicts and disagreements over commercial boundaries did much to impede the early progress of radio. In fact, forward movement was achieved only after an agreement that clearly delineated the spheres of industrial influence for each member of the new conglomerate. Under the accord, AT&T gained control over both wire and wireless telephone communications, and GE and Westinghouse received RCA patents to manufacture equipment. [kw]National Broadcasting Company Is Founded (Sept. 9, 1926) [kw]Broadcasting Company Is Founded, National (Sept. 9, 1926) National Broadcasting Company Radio Corporation of America Radio;networks [g]United States;Sept. 9, 1926: National Broadcasting Company Is Founded[06710] [c]Radio and television;Sept. 9, 1926: National Broadcasting Company Is Founded[06710] [c]Communications and media;Sept. 9, 1926: National Broadcasting Company Is Founded[06710] [c]Organizations and institutions;Sept. 9, 1926: National Broadcasting Company Is Founded[06710] Sarnoff, David Paley, William S.

Fortunately for RCA and the development of radio broadcasting, the narrow operating purview adopted early on by RCA leadership was widened through the insistent efforts and vision of David Sarnoff. Sarnoff, a commercial manager for RCA and an early intimate of Guglielmo Marconi, a pioneer in radio development, foresaw both the cultural and commercial possibilities of radio. His argument that radio sets would in time be common household items like phonographs was so persuasive that in less than a decade he would orchestrate the founding of the National Broadcasting Company (NBC) as a subsidiary of RCA. Sarnoff’s case, it should also be noted, was greatly assisted by successful radio broadcasting ventures by Westinghouse and AT&T.

The Westinghouse radio enterprise was inaugurated in 1920 when scientist and radio enthusiast Frank Conrad Conrad, Frank began broadcasting from his home on a regular basis. Conrad’s programming, although limited in entertainment richness, caught on with a number of amateur radio operators. In time, these individuals and a growing number of new listeners required equipment—radios built by Westinghouse and distributed by the Joseph Horne department store in Pittsburgh, Pennsylvania. Executives from both of these organizations quickly recognized that for the radio phenomenon to grow and prosper, more professional and varied programming would be required. This was accomplished when station KDKA signed on the air. The station’s broadcast of the 1920 presidential election results did much to spur the sale of sets.

From 1920 to 1921, only nine radio stations came into existence, but 1922 was a banner year for this new medium. Scores of department stores, colleges and universities, churches and religious organizations, and municipalities sought and received broadcast licenses. This flurry of activity did not go unnoticed by executives at AT&T. They theorized that significant long-term financial gains would accrue to holders of broadcast licenses. More important, short-run financial rewards were possible if broadcasts were paid by toll, just like telephone calls. Thus AT&T’s radio station WEAF was open to anyone who wished to buy time and perform over the airwaves. Over time, however, toll broadcasting, unlike telephone calling, found only limited success.

A most positive approach to financing radio involved connecting radio stations in a web of broadcasting activity. A primitive technology of network transmission was available as early as 1920. A “pickup” network was tried successfully at KDKA, which broadcast remote programs such as religious, sporting, and political events by running telephone wires from the place of the event with a central transmitter and receivers. A crude distribution network with two radio stations linked by telephone wires was initiated in 1922. The linkage of WJZ in Newark, New Jersey, to WGY in Schenectady, New York, to broadcast the World Series not only attracted the attention of many sports fans but also convinced executives at the technologically superior WEAF that network broadcasting was the future for radio.

The AT&T foray into a network arrangement occurred in June, 1923, when four stations were connected to broadcast the National Electric Light Association meeting from Carnegie Hall in New York City. An effort one month later to connect WEAF to WNAC in Boston through the use of two long-distance circuits, technologically advanced amplifiers, and special filters attracted an audience of one hundred thousand listeners and caused the press to become ecstatic over the possibilities for this new mode of communication. The WEAF broadcast of a speech by President Warren G. Harding from the St. Louis Coliseum shortly thereafter raised press and popular excitement over radio to new heights.

WEAF successes galvanized executives at Westinghouse, RCA, and GE to attempt a similar venture. Although prohibited from using telephone company lines, the competitors successfully forged a fourteen-station network broadcasting from Aeolian Hall in New York City. Despite the poor quality of transmission, stations in New York, Pennsylvania, Maryland, and Washington, D.C. were linked.

By 1925, two rival networks had formed. Although continuing to present locally oriented programs, the networks broadcast many individual programs and special events. Programming similarities aside, however, the two networks enjoyed distinct broadcasting philosophies and unique technology. Rivalry between the networks extended to animosities among their respective staff members and performers.

It is with this background that one can imagine the dismay of WEAF employees upon learning that AT&T had decided to bow out of the radio broadcasting arena. They learned that, after negotiations with David Sarnoff, the telephone company had sold its network to RCA for one million dollars. AT&T would now do what it did most efficiently—enjoy exclusive rights to wire telephone and two-way wireless telegraphy. In turn, RCA would lease radio relay facilities from AT&T and cease using Western Union lines.

With two fiercely independent and competitive networks under its control, RCA formed the National Broadcasting Company (NBC) as a subsidiary on September 9, 1926, to organize and take control over network broadcasting. Although senior managers from both organizations were integrated to run NBC, there was no easy way to combine the stations. Thus WJZ would operate as the leader of the Blue Network and the stronger WEAF would operate as the lead station for the Red Network. This bifurcated operation would exist for nearly two decades, until the Blue Network was sold to the American Broadcasting Company American Broadcasting Company (ABC) after a court ruling ordering divestment by NBC.


Network broadcasting at NBC was sporadic until early 1927, when the “national” in the company name became a reality with the addition of a number of West Coast stations to the network. What began in 1926 as a network of 19 station outlets grew until 1940, when the network was composed of 214 stations.

The early history of NBC is tied to the founding of its rival, the Columbia Broadcasting System Columbia Broadcasting System (CBS), by William S. Paley in 1928. Although lacking in radio experience, this young entrepreneur took control over two struggling networks and in time forged them into one of the world’s premier entertainment corporations. By attempting to appeal to large audiences with jazz and comedy offerings, in contrast to NBC’s more staid classical music and educational programming, CBS grew to seventy-six stations less than a decade after its founding. Shortly thereafter, it would surpass its older competitor in popular appeal.

The formation of NBC in 1926 as a network of independent radio stations linked by agreement and common interest had a dramatic effect on the way Americans are informed and entertained. The development of radio programs, the economics of broadcasting, and overarching effects on American culture can be traced to the founding of NBC and its main early rival, CBS.

During the 1920’s, as radio technology advanced, commercial managers explored new ways of paying for this new medium. Radio executives discovered early in the history of radio that broadcasting public events via telephone lines was an expensive undertaking. Artists, in addition, wanted to be paid according to their talents and accomplishments. Entertainers who in the nascent days of radio would accept first-class transportation to a radio studio as payment for their performance now wanted more tangible rewards in the form of a paycheck. Creators of shows and songs wanted royalties for their copyrighted material, which radio station managers and announcers previously had used liberally.

The network concept went a long way toward providing the financial wherewithal to rectify these problems. When the networks were formed, almost all programs were developed and produced by the network or by individual stations. In the 1930’s, broadcasting became a big business. By 1931, virtually all sponsored network programs were developed by advertising agencies. Sponsors typically paid two hundred to five hundred thousand dollars to produce a popular program and an additional ten thousand dollars per week to be hooked up to NBC’s coast-to-coast network of about fifty stations.

“Commercial sales talks” dominated early radio broadcasting, but throughout the early years networks expanded their schedules. Sponsored programs began to share airtime with unsponsored ones and with special events, thus providing greater diversity in the broadcast schedule. In 1931, for example, the NBC network featured hundreds of special events and international programs from around the world. It broadcast twenty-eight appearances by the president, thirty-seven by cabinet members, and seventy-one by U.S. senators and representatives. It also earned a net income of more than two million dollars.

The founding of NBC as a powerful national broadcasting network brought intensified efforts to improve radio transmission and reception. Competition between the WEAF network, controlled by AT&T, and the WJZ network, operated by RCA, had hampered the technological enrichment of radio. With conflicting cross-licensing agreements mostly resolved, network listeners could enjoy broadcasts of popular programs free of static and other local interference. Moreover, in an effort to ensure that radio technology would always stay on the cutting edge, NBC appointed a board of consulting engineers under Alfred N. Goldsmith Goldsmith, Alfred N. of RCA. The board included Ernst F. W. Alexanderson Alexanderson, Ernst F. W. of General Electric and Frank Conrad of Westinghouse.

Although radio had its early detractors, the National Broadcasting Company and its major competitors—CBS, Mutual, and the American Broadcasting Company—had a dramatic impact on American culture. The broadcast of a sporting event, a political speech, a religious talk, or a program of wide popular appeal crossed not only geographic boundaries but also cultural ones. A diverse population was connected as never before, and a national identity was forged in ways few of the pioneers of radio could have envisioned. National Broadcasting Company Radio Corporation of America Radio;networks

Further Reading
  • citation-type="booksimple"

    xlink:type="simple">Barnouw, Erik. A Tower in Babel. Vol. 1 in A History of Broadcasting in the United States. New York: Oxford University Press, 1966. Offers important insights into the social, commercial, and technological factors that influenced the development of early radio broadcasting.
  • citation-type="booksimple"

    xlink:type="simple">Bilby, Kenneth. The General: David Sarnoff and the Rise of the Communications Industry. New York: Harper & Row, 1986. Biography written by a longtime associate of Sarnoff benefits from both the author’s conversations with the visionary broadcasting leader and his own extensive research while at the Harvard Business School. An invaluable resource for those interested in learning how leaders such as Sarnoff and Paley helped shape the broadcasting industry.
  • citation-type="booksimple"

    xlink:type="simple">Douglas, George H. The Early Days of Radio Broadcasting. 1987. Reprint. Jefferson, N.C.: McFarland, 2001. Authoritative and highly enjoyable study provides important information on such topics as news reporting, sportscasting, classical and popular music programming, and educational stations in the nascent stage of radio.
  • citation-type="booksimple"

    xlink:type="simple">Head, Sydney W., Thomas Spann, and Michael A. McGregor. Broadcasting in America: A Survey of Electronic Media. 9th ed. Boston: Houghton Mifflin, 2000. The standard introduction to the institutions of radio and television in the United States.
  • citation-type="booksimple"

    xlink:type="simple">Lewis, Thomas. Empire of the Air: The Men Who Made Radio. New York: HarperCollins, 1991. Exceptionally well-written and thoroughly researched chronicle of the pioneering contributions to the development of radio. Written for both the serious scholar and the general reader.
  • citation-type="booksimple"

    xlink:type="simple">Lichty, Lawrence W., and Malachi C. Topping, comps. American Broadcasting: A Source Book on the History of Radio and Television. New York: Hastings House, 1975. Presents the history of broadcasting in a series of articles written by scholars, journalists, and broadcasting executives who reflected on events in the industry as they occurred. Provides extensive coverage of networks and broadcast economics. Includes statistical tables.
  • citation-type="booksimple"

    xlink:type="simple">Lyons, Eugene. David Sarnoff. New York: Harper & Row, 1966. Biography provides important insights into the formation of NBC and Sarnoff’s contribution to the growth and development of the television medium. An informative and entertaining work.
  • citation-type="booksimple"

    xlink:type="simple">Sarnoff, David. Looking Ahead: The Papers of David Sarnoff. New York: McGraw-Hill, 1968. Presents extensive excerpts from more than one hundred documents covering Sarnoff’s entire professional life, including speeches, public statements, and letters. Captures Sarnoff’s passion for broadcasting, courageous leadership under adversity, and vision of the future in his own words.
  • citation-type="booksimple"

    xlink:type="simple">Sterling, Christopher H., and John Michael Kittross. Stay Tuned: A History of American Broadcasting. 3d ed. Mahwah, N.J.: Lawrence Erlbaum, 2001. The standard one-volume history of radio and television in the United States. A good beginning point.

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Categories: History