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Rise of Network and Cable Television |

Rise of Television as Marketing Medium

“Television won’t last because people will soon get tired of staring at a plywood box every night.”
–Darryl Zanuck, movie producer, 20th Century Fox, 1946

Starting in the late 19th century, the idea to transmit and decode moving images was put forth in Europe. This culminated in the first scheduled television service in the US started on July 2, 1928. By 1947, there were 40 million radios and only about 44,000 television sets with the majority being clustered in the New York area due to broadcast networks. By 1951 the infrastructure stretched to the West Coast. [Source]

As with all successful technology adoptions, prices to acquire finally dropped to levels middle-class Americans could afford by 1947 with Motorola’s VT-71 priced at $189.95 (accounting for inflation this would be an astounding $1,843 today).

Amazingly only .5% of Americans had a television in 1946 but 55.7% owned one in 1954 and by 1962 ownership rose to 90%. The rise of television is one of the swiftest technology adoption rates in history. [Source]

Companies scratched their head about who would pay for all this content and looked to radio and newspaper advertising models where the content was given away for free (shows, news, etc.) and in exchange advertisers paid for spots to plug their products. NBC developed various drama series in the 1950s and sold sponsorship rights for programs like Kraft Television Theater.

Sound and Motion: Television Creates A New Media Experience

Like radio before it, the experience of watching television in the privacy of your own home was nothing short of mesmerizing. Stories that used to exist in only spoken form now had the richness of actors and could be enjoyed on a weekly basis. Americans began relating to others through conversations around their favorite shows. The medium was starting to shape culture and social interactions.

A Dream Medium for Marketers

Marketers began to see television as a massive shift in advertising tactics and one of incredible opportunity. It was a once in a lifetime medium for marketers – much like the web is today. Never before had moving images and voice been so easily combined to promote a product. Have a great laundry detergent? Well, let’s show our product instantly removing stains with a call to action to watch for coupons in this Sunday’s paper. The equation was fairly straight forward for driving sales and growth in consumer products. Company growth was limited in large part by the amount of dollars available to spend on advertising.

The nation was coming out of war, had a population boom, and was ready to purchase consumer goods in quantities and ways the world had never seen. Television networks had an incredible experience to offer and only three networks to access it on. The audience was tightly corralled with few choices for entertainment.

And so the three pillars of traditional media were sealed: print, radio, and television.

Market Domination: Before Microsoft there was RCA

As we saw in the previous section, RCA leveraged end to end control of device and connection in radio. As a new media emerged, the company also performed the incredibly rare feat of dominating another technology platform – television.

The National Broadcasting Company (NBC) was formed by RCA in 1926, funded in large part by its lucrative radio business. Soon after the company added another network and called the two NBC-Red and NBC-blue, respectively. Government regulators became concerned over the company’s increasing control of the airwaves and in 1943 forced the company to sell its Blue network, which eventually became ABC. The big three was thus born: NBC, ABC, and CBS. [Source].

The tyranny of the three in this new field held considerable sway with companies and consumers. Adoption was helped along by visionary executive teams that saw not only the potential of such new technology but were also comfortable with the considerable risks and infrastructure investments needed.

The Tyranny of a Few

With a handful of companies controlling the words we read, the news and music we listened to, and the shows we watched, they wielded unbelievable power not only in product marketing but in society as a whole.

In the 1960 presidential race, candidate John F. Kennedy went head to head with Richard Nixon in the first ever televised debate. The debate was scheduled late in the day and Kennedy took the time to shave and was amicable to having makeup applied. Nixon declined. Once on-air Kennedy looked rested and youthful. Nixon appeared haggard and sweaty. The momentum shifted to Kennedy as his nonverbal communication style and appearance won over voters. He simply came across as more likable through the medium of television. Within a few short years, television was already able to change politics and shape public opinion.

The costs to deliver such messaging with a national reach were far less than door-to-door sales. Companies had to compete through advertising and leveraged all they could through creative work and big media buys. The popular television series Mad Men seeks to show what Madison Avenue was like during this hay day.

The First Fracturing

During the late 1970s, cable television rose to prominence in many American homes with almost 16 million paying for the service by the end of the decade. While there had traditionally been the major broadcast networks of ABC, NBC, and CBS which broadcast their content for free, the cable companies looked to charge customers for access to their packaged content and in addition also relied heavily on advertising.

Following deregulation with the 1984 Cable Act, growth exploded and an endless variety of channels sprouted up. The rise of stations devoted exclusively to news, sports, or music allowed viewers to tune into the content they wanted. While they still had no say over the scheduling, they were one-step closer to picking the subject matter. [Source]

The result of all this choice led to a splintering of the television audience. While Americans continued to watch more television, viewers were not as tightly contained as before. Marketers used this to their advantage and were able to more finely target their messaging based on the viewership demographics. In short, they traded broad reach for the ability to segment viewers. For example, those viewers tuning into CNN would likely be college-educated and upper-income and thus potential customers for financial services.

The model of advertising spends associated with sales more or less held true but was starting to ever so slightly wane in its ability to deliver results.

The video below gives a good overview on the invention of the television.