From radio chains to television networks
The commercial networks that dominated American television were not single transmitters. A national television network is not a single transmitter. It is an arrangement among a program supplier and many local stations, in which one program is sent to all of them at the same time. The business pattern was borrowed from radio. In the 1920s, NBC linked stations by telephone line to broadcast the same programs in many cities, starting in 1926, and CBS followed in 1927. These radio networks showed that national advertisers would pay for a large audience, and that program makers could spread the cost of expensive talent across many stations.
When television arrived, the radio companies moved in. NBC and CBS, already powerful in radio, set up television operations in the late 1930s and 1940s, and a third network, ABC, emerged in the 1940s. ABC came from the NBC “Blue” network, which NBC was required to sell in 1943 after American regulators adopted rules intended to limit the control of a single company over radio stations and networks. A fourth, the DuMont Television Network, was run by a television-set manufacturer, Allen B. DuMont, and operated from 1946 into the middle of the 1950s. DuMont struggled with limited funds and the shortage of affiliated stations, and it closed in 1956, according to most accounts.
The technical link
Before a network could exist, there had to be a way to carry live pictures between cities. Television needs a wide band, so the telephone lines used for radio were not enough. AT&T built coaxial cable and microwave radio relay routes, linking the eastern cities in the late 1940s and reaching the West Coast in 1951. Later, network feeds moved to communications satellites, and recorded programs on magnetic tape could be shipped. Networks rented the circuits, and for years the available routes limited where programs could be shown live. Stations not on the network route could get programs on film, kinescope recordings that were shipped by mail or air, which were poorer in quality and arrived late.
The freeze and the shape of the market
A regulatory decision shaped the network business. The Federal Communications Commission stopped issuing new television licenses in the fall of 1948 and did not resume until 1952. During the freeze, a limited number of cities, mainly in the Northeast and on the Pacific coast, had stations, and many cities had one or two. With few stations in each market, the networks’ strongest affiliates were concentrated. DuMont and ABC had trouble finding good stations in many cities, because NBC and CBS had signed up the best ones. That put a heavy disadvantage on the smaller networks. When the freeze ended, a large number of new stations signed on, but by then the two leaders had established their lead.
Who paid
In the early period, American networks followed the radio model, in which a single sponsor paid for a program and often had a large say over its content. A company might sponsor a weekly variety show, and the program’s name often included the company’s. The networks provided the facilities and time. Production costs, however, rose as audiences grew, and single sponsors found it harder to cover them.
During the 1950s, networks moved toward a system in which they controlled the schedule and sold shorter advertising spots to many advertisers. This gave networks more power over what was produced and when. It also encouraged shows with broad appeal, designed to attract the largest possible audience for the advertisers. The ratings system, in which companies measured how many households were watching, became the currency of the trade.
Other models
Not every country used the American approach. In Britain, the BBC was a publicly funded service financed by a license fee from the beginning of its television operation, and it held a monopoly on television until independent television began in 1955. The independent service was organized as a set of regional program companies, each holding a franchise, and they shared a network schedule. That is a different structure from the American one, in which local stations are independent businesses affiliated with national networks, although both create a way to combine local and national content.
In many other countries, state-owned or state-chartered broadcasters ran the main television services, often with limited advertising. Commercial competitors arrived later, in some cases decades later, as regulations changed.
New networks and consolidation
The three-network pattern in the United States lasted for several decades. A fourth, Fox, began in 1986 and grew into a major network. Cable channels began competing for audiences, and later digital platforms did as well. Ownership of networks has changed frequently, with mergers and corporate restructuring. Regulators have at times limited how many stations one company may own, and how much of the program supply networks may control, with rules revised repeatedly over the decades.
The business of the television network is therefore a story of three connected problems: how to move the signal, how to share the cost, and how to arrange the relationship between those who make programs and those who show them. The answers were worked out in the early days of radio, adjusted for television, and have been revised many times since.