Columbia Broadcasting System

William Paley invests in the radio broadcaster and becomes president of the company. The world's second oldest broadcasting network, CBS Television Network (formerly CBS Corporation) was acquired by Viacom Inc. in 2000. The network provides television programs (including such hits as Survivor, 60 Minutes, and Everybody Loves Raymond ) to more than 200 affiliate stations in the United States, including 20 stations owned by Viacom. During the late 1990s, CBS Television Network reversed a downward slide and rose to become the nation's top network. In the late 1920s Arthur Judson, the impresario of the Philadelphia and New York Philharmonic orchestras, approached the Radio Corporation of the National Broadcasting Company (NBC), then the only radio broadcaster in the United States, with an idea to promote classical music by airing orchestra performances; NBC declined. Undaunted, Judson founded his own broadcasting company, which he named United Independent Broadcasters, Inc. (UIB), in 1927. Lacking the strong capital base NBC was afforded by its parent, RCA, UIB struggled to stay afloat for several months. In the summer of 1927, however, Judson found a rich partner in Columbia Phonograph, a leader in the phonograph record business. Columbia Phonograph bought UIB's operating rights for $163,000; the new company was named the Columbia Phonograph Broadcasting System. Columbia Phonograph sold UIB's operating rights back to the broadcasting company in 1928, however, apparently because the phonograph company was frustrated by a lack of advertiser loyalty. The broadcasting company's name was then shortened to the Columbia Broadcasting System (CBS), and its finances were greatly enhanced that year when William Paley--the son of a Russian cigar company owner who eventually helped CBS earn its reputation as a classy network--invested $400,000 in the company's stock. At the time of Paley's CBS stock purchase, the company consisted of only 16 affiliated radio stations and possessed no stations of its own. Paley, who was quickly elected president of the company, tripled earnings in his first year. This success was accomplished by offering to prospective affiliates the network's entire unsponsored schedule at no cost, in contrast to NBC, which charged affiliates for all programs. In return for free programs, affiliates gave CBS airtime for sponsored broadcasts, allowing the network to assure contracted sponsors that airtime would be available. Within a decade, CBS added nearly 100 stations to its network. Since the number of affiliates a network possesses determines the number of people it can reach, which in turn determines what a sponsor is charged, CBS was soon on firm financial ground. By 1930 CBS had 300 employees and total sales of $7.2 million. Although CBS fared well, NBC continued to dominate the entertainment-oriented broadcasting industry. Paley, viewing news and public affairs as a quick way for CBS to gain respectability, decided to explore the potential for establishing its own network news. In 1930 he hired Ed Klauber to institute a news and public affairs section, and in 1933 the Columbia News Service, the first radio network news operation, was formed. By 1935 CBS had become the largest radio network in the United States. In 1938 Edward R. Murrow began his career at CBS as head of the network's European division. The first international radio news broadcast was initiated later that year with Murrow in Vienna, Austria, William L. Shirer in London, and others reporting from Paris, Berlin, and Rome. With these newsbreaks, CBS began the practice of preempting regular programming. Interruptions were planned for prime listening time--8:55 to 9:00 p.m.--and were intended to give the network a "statesmanlike" image. CBS entered the recording business in 1938 with the purchase of the American Record Corporation. Later called the Columbia Recording Corporation, it soon became an industry powerhouse. By the beginning of World War