September 18, 1927: Columbia Phonographic Broadcasting System first hits the airwaves. The company was founded on January 27 with the creation of the United Independent Broadcasters network in Chicago. Started by New York City talent agent, Arthur Judson, the company needed some cash flow and other investors were sought out. In April, Columbia Phonograph Company, manufacturers of Columbia Records, stepped up and renamed the company. They began airing programming on this day with a presentation by the Howard Barlow Orchestra from their flagship radio station in Newark, New Jersey (WOR) and fifteen affiliates. Operational costs were high, mostly to AT&T for use of their land lines and by the end of the Columbia Phonograph wanted out of the deal.
Early in 1928, Judson sold the concern to brothers Isaac and Leon Levy, owners of the network’s Philadelphia affiliate WCAU and their partner Jerome Louchenheim. The three men weren’t interested in actually running the business and brought in William S Paley, the wealthy 26 year old son of a Philadelphia cigar manufacturer. The Paleys were Levy’s in-laws. With the record company out of the picture and Paley acting as president, he shortened the name to Columbia Broadcasting System (CBS). He was well acquainted with the opportunity for advertising as the family’s cigar business was thriving using the system – after young William convinced the family elders to use it, business doubled.
During the first year, the company moved stations and ended up at Steinway Hall on West 57th Street in Manhattan and upgraded the signal to 860 kHz. They brought in stations coast to coast with networks in Los Angeles and San Francisco as well as across the midlands. By the fall of 1928, Paley was in talks with Adolph Zukor of Paramount Pictures who was planning to get into radio in retaliation to RCA’s forays into motion pictures. In September 1929, Paramount acquired 49% of CBS in return for a block of stock worth $3.8 million at the time. With the crash of the stock market, the deal with Paramount left Paley with not very many options except to make the business a success.
Paramount, with its own financial problems secondary to the Great Depression ended up selling CBS stock back to CBS in 1932. With Paley in charge, their earnings tripled from $1.4 million to $4.7 million. They were in business. Paley’s next step was to upgrade their business plan and improve affiliate relations. Rival NBC was doing business in a way that hurt small and medium sized stations. Paley had an innovative notion and many affiliates moved from NBC to CBS. They were off and running. Television was added to the mix with the first broadcast on July 1, 1941. Today, CBS continues with broadcasts in both venues with Leslie Moonves as Chairman.
He who attacks the fundamentals of the American broadcasting industry attacks democracy itself.
One very common error misleads the opinion of mankind, that authority is pleasant, and submission painful. In the general course of human affairs the very reverse of this is nearer to the truth. Command is anxiety; obedience is ease.
White lies always introduce others of a darker complexion.
What we are doing is satisfying the American public. That’s our job. I always say we have to give most of the people what they want most of the time. That’s what they expect from us. – all from William S. Paley
Also on this day: Capitol Building – In 1793, George Washington laid the cornerstone for the Capitol Building.
High Class – In 1837, Charles Lewis Tiffany and partner opened a new store.
All the News That’s Fit to Print – In 1851, The New York Times first went on sale.
Old Faithful – In 1870, the geyser was named by an expeditionary force.
Hull House – In 1889, Hull House opened.