David Sarnoff and Radio Corporaton of America RCA Presenation Paper
Until the 1970s, U.S. firms led the world in consumer electronics. American companies brought forth a steady output of affordable radios, phonographs, black-and-white television sets, and finally color TVs. Experts everywhere assumed that American companies would remain on top for a long time, perhaps forever. But those firms lost more than just their primacy.
After having been almost unchallenged before the 1960s, they fell behind their European and Japanese competitors during the 1970s and 1980s, and succumbed altogether by the 1990s.
Both the rise and fall of the U.S. consumer electronics industry are reflected in the story of the Radio Corporaton of America(RCA) and its charismatic leader David Sarnoff which is the main topic of my presentation today.
Sarnoff, who worked as head of RCA for nearly forty years did more than any other person to bring radio and television into the American home, and his life coincided almost exactly with the development of radio and television.
As early as 1912, David Sarnoff seemed destined for greatness in telecommunications. While working as a young wireless, he received the first news of the Titanic’s disastrous collision with an iceberg (14 April ), then remained on duty for 72 hours, relaying information and survivor lists from the rescue ship. After the incident Congress passed a law requiring large passenger ships to install wieless communications.
In 1919, when British Marconi sold its American Marconi assets to General Electric (GE) to form RCA, Sarnoff came on board as commercial manager. Sarnoff was soon in charge of broadcasting as general manager of RCA (April 29, 1921), then vice president (1922) and executive vice president of RCA (January 1, 1929). He was integral in the formation of NBC in 1926. He negotiated the secret contracts with American Telephone and Telegraph (AT and T) that led to NBC’s development. With the acquisition of AT and T’s broadcasting assets, RCA had two networks, the Red and the Blue, and they debuted in a simulcast on 15 November 1926.
In the 1920’s, he managed his company’s patent portfolio to the point that it was virtually impossible to manufacture or sell radio equipment without paying royalties to RCA. In the late 1920’s
In 1927 Sarnoff was elected to RCA’s board and during the summer of 1928, he became RCA’s acting president
During the end of the decade Sarnoff negotiated successful contracts to form Radio-Keith-Orpheum (RKO) motion pictures, to introduce radios as a permanent fixture in automobiles, and to consolidate all radio manufacturing by the Victor company under RCA’s banner. On 3 January 1930, the 39-year-old Sarnoff became RCA’s president.
The next two years were pivotal in Sarnoff’s life as the Department of Justice sued GE and RCA for monopoly and restraint of trade. Sarnoff led industry efforts to combat the government’s suits that would have destroyed RCA. The result was a consent decree in 1932 calling for RCA’s divestiture from GE and the licensing of RCA’s patents to competitors. When GE freed RCA, Sarnoff was at the helm and, for nearly the next three decades, he would oversee numerous communications development, including television.
Sarnoff’s interest in television began in the 1910s, when he became aware of the theory of television. By 1923, he was convinced television would be the next great step in mass communication.
Under Sarnoff’s direction, RCA spent over thirteen million dollars from 1930 to 1939 to develop television, which was a staggering sum during the Depression. RCA also engaged in patent litigation with Farnsworth Television and Radio Corporation, which held key television patents. It was alleged that the Federal Radio Commission was being manipulated by the RCA cartel of companies. Purchasing of key Patents ensured RCA’s dominance of radio and television technology, but simultaneously helped to finance and encourage continued television experimenation outside RCA. Sarnoff’s determination ensured that RCA was the company to bring television to the American public. Without Sarnoff’s prophetic vision, widely available commercial television would certainly have been substantially different.
Working well into his seventies, Sarnoff continued to push RCA and its engineers, investing money and work-hours in computers and aerospace technology.