Last week we asked this question: "Until 1967, there were three major broadcasting companies, but in that year a fourth company appeared. What are the full names of the three primary broadcasting companies and their call letters, what is the fourth company, and what makes it so different than the other three?"

Before we answer this query about television networks, let me explain where we're going today. Although Cora's focus concerns televised politics, and my focus is on answering her question through history, the concentration throughout this series is on how we can use media as a tool for stock market research. If we understand how TV broadcasting became a business, we might view programming and commercials in a different light. As the answer to the question above is provided below, take note of all the name-dropping that goes on, because many of these companies remain familiar entities today:

Electronics is where this business began, long before 24/7 news and political blips. GE (General Electric) creates our point of entry in 1892. At that time, GE developed through a merger between Edison General Electric & Thomson-Houston Electric. In 1919 Radio Corporation of America (RCA) incorporated to control patents of General Electric, AT&T (American Telegraph & Telephone), Westinghouse, and United Fruit. At this point, we can begin to break out the broadcasting companies and share their origins (the links below take you to the networks' official websites):

NBC - In 1926, NBC (National Broadcasting Company) was created when RCA purchased several radio stations (including AT&T's programming network) and added them to their existing network. This purchase created two NBC networks, one known as "Red" (AT&T's network) and the other as "Blue." Throughout the 1930s, NBC created several other networks, including "Gold," "Orange," and "White" operations that broadcast from various U.S. regions. Until the 1940s, NBC networks and their owned-and-operated radio stations controlled the majority of radio audiences, radio affiliates, and advertising dollars in the American radio industry. We'll leave it at that for the moment.

CBS - In 1926, CBS (Columbia Broadcasting Systems) was created as a joint venture radio broadcasting company between Columbia Records and talent agent Arthur Jackson. Known then as "The Columbia Phonograph Broadcasting System," CBS lost money the first year in business, so Columbia Records sold their interest to a group of investors headed by cigar manufacturer, William S. Paley. If you read last week's column, you know about Edward R. Murrow. This man was the first of many famous news anchors hired by CBS, and this move established CBS as a major news broadcasting system. CBS broadcast their first TV show in 1939.

ABC - For ABC (American Broadcasting Company), we're going back to NBC. In 1940 (when FM radio was first established), the FCC (Federal Communications Commission) decided that NBC was a monopoly, and they demanded that NBC divide itself into two companies. The "Red" network was too valuable to lose, so NBC sold their "Blue" network system to Edward Noble, owner of Lifesaver candy. NBC Blue was then renamed ABC. However, at the time of the sale, there weren't enough VHF (very high frequency) radio stations to broadcast three TV networks, so ABC had a tough first decade. In the early 1950s, though, UPT (United Paramount Theatres) merged with ABC and brought they brought their pocketbook with them. When ABC finally gained a foothold in TV, sports programs became their focus.

The fourth network is a bit different than those listed above, because this network does not run on advertising dollars. Instead, this broadcasting firm is a private, non-profit organization that is owned and operated by over 300 U.S. public television stations:

PBS - In the 1960s, NET (National Educational Network) was created indirectly by President Lyndon Johnson. He created CPB (Corporation for Public Broadcasting) on 7 November 1967 based on an act called the Public Broadcasting Act of 1967 (NPBA). In 1969, NET was bouyed by the money invested by a combination of corporate sponsors, individuals and non-profit corporations, and the Federal Government, and NET became PBS (Public Broadcasting System). PBS aired for the first time in October, 1970, and this network is now known for its radio (NPR - National Public Radio) and TV shows for children, about the arts, and for sometimes controversial talk shows and interviews. Since this broadcasting network relies on corporate, individual, and government funding, their shows come under fire by various special-interest groups who either demand equal time or attempt to cut funds.

Now that last week's question has been answered, let's go a little bit deeper. Until the 1960s, NBC and ABC had a rough go at etsablishing their TV audiences for a number of reasons. However, all networks established their own niches by the end of this decade, and soon other stations and companies were established. News became the money-maker, and each network vied against the other to gain top billing. If you go to all the network links above, you'll find news sections within each site. Within the news, there is a section for "business" or the "stock market." However, this setup is a bit different with PBS, because they are focused on educational programs, games, and other devices to help kids and teens learn about the stock market.

There isn't a question this week, but a project might keep you all busy?sit down with your children and visit these sites above and Wikipedia to learn how these broadcasting networks evolved over the past twenty years, and to find out who owns and/or operates these broadcasting companies today (may not be the same companies!). At Wikipedia, just punch the call letters from any organization above to find more information about these entities and their histories.

While you all are busy with that project, Cora and I will get ready to tell you more about televised politics next week, and how this venture plays out today on the stock exchanges.

Until Next Week,
Linda Goin

BUYandHOLD does not recommend any securities. The securities mentioned above are being used for informational and illustrative purposes only and should not be regarded as an offer to sell or as a solicitation of an offer to buy.