Copyright 2020
Greenstone Media Consulting, LLC
Greenstone Media Consulting, LLC
American Broadcasting Company
Seattle - 1929
Seattle - 1929
Because Linden aspired to his stationand his network’s greatness, he set KJRand KYA up with huge musical and dramatic staffs and hired high respectedprofessionals to lead them. So, compared to the typical structure of radio stationsat the time, with some network programming and some in-studio musiciansperforming, Linden’s stations had musicians playing virtually full days ofprogramming on the ABC. It was a sound artistic strategy, and ABC was oftensaluted in the west as having thebest programming on the radionetworks. However, it was anultimately reckless financial strategy.
Linden's Unique Vision
Click Comparison of ABC and NBC program schedules - 1929
Note the dramatic difference in the number of hours ABC was programming vs NBC
Note the dramatic difference in the number of hours ABC was programming vs NBC
NBC and CBS operated in a “traditional” network manner. Their business was selling airtime of their affiliated stations to sponsors. The network compensated the stations for that airtime in varying ways. In NBC’s case the network initially charged its affiliates for non-sponsored (known as sustaining) programs which it provided to stations to help fill their airtime and then paid them, at a reduced rate, for station airtime they used for commercially sponsored programs. CBS had a somewhat different approach in which it gave stations the use of sustaining programs in exchange for no-fee use of a specified number of hours of station airtime while paying them for additional hours used.
Both NBC and CBS, however, were essentially in the business of selling airtime and, other than for sustaining programming offered to affiliates, didn’t produce the large, expensive programs that were sponsored. The client (sponsor) actually paid the costs of producing those programs.
Moreover, in 1929 when ABC was in the ascendency, neither NBC nor CBS produced full days of network content. On some days, such as Sundays, they may have only offered one or two programs during the entire day which, since Sunday programs were not likely sponsored, both reduced their sustaining program production costs as well as their line charges for network interconnection (which were charged by the hour).
Moreover, in 1929 when ABC was in the ascendency, neither NBC nor CBS produced full days of network content. On some days, such as Sundays, they may have only offered one or two programs during the entire day which, since Sunday programs were not likely sponsored, both reduced their sustaining program production costs as well as their line charges for network interconnection (which were charged by the hour).
That wasn’t Linden’s vision. Because he had hired huge staffs of musicians in both Seattle and San Francisco and had them working full days, the ABC offered MANY more hours of daily programming than either NBC or CBS (or even for their two combined schedules). Because network sponsors had gravitated to the evening hours, neither NBC nor CBS had very much in the way of sponsored daytime programming. So ABC’s decision to program virtually full broadcast days from 7 am through to midnight meant that ABC was offering programming during daytime hours for which no sponsor could realistically be found.
In a 1928 speech to the American Association of Advertising Agencies, the president of one of the nation’s leading advertising agencies predicted that would change in 1929. He believed sponsors would buy out the networks’ evening programming hours causing many to newly seek daytime schedules. It seems likely that Linden shared that expectation since he quoted it in ABC’s June, 1929 stock offering notice. No one counted on the October 1929 Stock Market Crash, of course.
So, essentially Liden’s business plan was to:
• Program essentially full broadcast days
• Pay for staff musicians to fill those many hours
• Pay for the line charges to run full broadcast days on the ABC
• Use the grander nature of the ABC to attract affiliates and sponsors in competition with the somewhat lesser efforts of NBC and CBS
• Program essentially full broadcast days
• Pay for staff musicians to fill those many hours
• Pay for the line charges to run full broadcast days on the ABC
• Use the grander nature of the ABC to attract affiliates and sponsors in competition with the somewhat lesser efforts of NBC and CBS
However, it was impossible to sustain those unusually high costs (compared to NBC and CBS) from the revenues that could be generated for sponsorship of ABC’s evening programming (which in fact turned out to never be particularly heavily sponsored).
ABC’s position was somewhat helped because CBS, which had no significant western U.S. coverage of its own, contracted to have the ABC carry some CBS evening programming when the CBS sponsor chose to pay additional airtime costs for the added western coverage. So income from CBS’s use of the ABC would have somewhat helped but, at most, the CBS sponsors willing to pay the added costs for ABC carriage used only 60 to 90 minutes of ABC’s evening time.
ABC’s position was somewhat helped because CBS, which had no significant western U.S. coverage of its own, contracted to have the ABC carry some CBS evening programming when the CBS sponsor chose to pay additional airtime costs for the added western coverage. So income from CBS’s use of the ABC would have somewhat helped but, at most, the CBS sponsors willing to pay the added costs for ABC carriage used only 60 to 90 minutes of ABC’s evening time.
The result, of course, was that the ABC couldn’t begin to generate sufficient revenue from the sale of airtime to cover its higher-than-typical network expenses. Other funding would be needed.
.png)