Number
17
RCA Corporation
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Moments after the R.M.S. Titanic hit that infamous iceberg on April 14, 1912, a 21-year-old radio operator with the Marconi Wireless Telegraph Company picked up its distress signal in his Manhattan office. The young Russian immigrant David Sarnoff remained at his post atop the Wanamaker department store for the next 72 hours, relaying increasingly pessimistic reports from sea to others throughout his network. He was unable to stop the ship’s sinking, of course, but his imagination was piqued by the way he could relay information about it around the world.
As Sarnoff rose through the ranks at Marconi over the next several years, he couldn’t stop thinking about ways to make such communication available to ordinary citizens. In 1916, those contemplations finally settled into a solid idea for a commercially marketed receiver that he called a “radio music box.” It would transmit songs, Sarnoff speculated, as well as news and other programming. Most people could not accept the notion of music and voices beaming directly into their homes, so it took a few years before those who did were able to help make it a reality.
Not surprisingly, when they did—through a new company called Radio Corporation of America—Sarnoff became an integral part of it and would remain so for the rest of his life. During that time, the entertainment conglomerate that RCA became aided two war efforts, pioneered the audio broadcast of live events, made the equipment that both transmitted and received them, built phonographs and produced motion pictures, formed the NBC network, built New York’s Rockefeller Center and Radio City Music Hall, introduced television to the public, created the standard for color TV and produced the first sets to employ it, and even brought images of space flight into America’s homes.
Since Sarnoff ’s death in 1971, RCA has admitted going through some tough times. But despite competition that cut deeply into its once formidable position in radio and television and its sale to a French-based firm that had a hand in its founding nearly seven decades earlier—the company remains a significant force in electronics and a firm most consumers still know and trust.
RCA’s roots go back to Thomas Edison and Elihu Thomson, a 19th century chemistry teacher at Philadelphia’s Central High School. Fascinated by electricity, Thomson started a company with fellow teacher Edwin Houston to pursue his interest just as Edison was forming the Edison General Electric Company in New Jersey. Thomson-Houston won a major award at the Exposition Universelle in Paris—the 1889 event for which the Eiffel Tower was erected—and three years later merged with Edison General to create General Electric. Thomson-Houston’s principals then returned to France, where they established a new company with similar goals.
Around that time, Guglielmo Marconi was preparing his first wireless transmission. The electrical engineer’s pioneering work quickly led to the establishment of Marconi Wireless, which opened an American branch in 1899 and for the next two decades remained the only company able to send transatlantic radio signals. With the outbreak of World War I, Assistant Navy Secretary Franklin D. Roosevelt determined that such technology should rest in U.S. hands and turned to General Electric for help. In 1919 GE responded by forming the Radio Corporation of America, which took over American Marconi and began marketing the related equipment that it was producing.
There were barely 5,000 radios in American homes when RCA began, and only the Westinghouse company was broadcasting commercially. That all changed quickly, however. David Sarnoff, who moved from Marconi to RCA, jump-started the new industry in 1921 by airing the first live sports broadcast: a heavyweight boxing championship between Jack Dempsey and Georges Carpentier that attracted 300,000 listeners. Baseball’s first broadcast of the World Series came a few months later, and stations began appearing around the country to tap into the new demand. By 1924, more than 2.5 million radios were in use, and RCA had built most of them. When Charles Lindbergh made his historic flight across the Atlantic in 1927, some 6 million sets could tune in to the news.
Correctly assessing the potential of radio, Sarnoff bought New York’s WEAF and made it the anchor station for a new nationwide network, which he dubbed the National Broadcasting Company. It soon had 25 member stations stretching from coast-to-coast. Its first major transmission was the Rose Bowl football game on New Year’s Day, 1927. Much like the boxing match aired previously, it proved enormously successful and helped radio’s popularity soar. RCA, which had been marketing sets built by GE and Westinghouse, was spun off to take over all research and development, manufacturing, and sales operations. It then bought the Victor Talking Machine Company and began making phonographs as well as radios. Along with other assets, the newly renamed RCA Victor acquired its popular “His Master’s Voice” trademark featuring Nipper the Fox Terrier listening intently to an antique phonograph. In years to come, this would prove practically as well-known as any of the company’s products.
The 1929 stock market plunge hit RCA hard, as consumers turned away from purchasing goods like radio sets. Undaunted, Sarnoff expanded the company’s manufacturing capacity and—utilizing NBC’s talent pool—joined with a chain of vaudeville theaters to open the RKO movie studio. He began construction on New York’s Rockefeller Center and Radio City, which RCA and NBC later utilized as headquarters. And he set his sights on new horizons by hiring engineer Vladimir Zworykin to help develop an even more advanced technology: television.
Sarnoff had forecast the possibility of TV as early as 1920, and crude pictures were already being transmitted by the time RCA entered the game. Zworykin, one of the field’s pioneers, told Sarnoff it would take 18 months and $100,000 to develop a marketable system. It ultimately took 10 years and $50 million, but the two were able to unveil RCA television at the 1939 New York World’s Fair. President Franklin D. Roosevelt, who had been instrumental in RCA’s creation and a frequent voice on NBC radio, became the first head of state to appear on the new medium when his opening remarks were telecast.
Commercial development of TV halted when the United States entered World War II, and RCA converted its plants to produce bomb fuses, mine detectors, and even recorded entertainment for the troops. “All our facilities and personnel are ready and at your instant service,” Sarnoff wrote to the president. As soon as the war ended, he immediately resumed TV production and in 1946 introduced a 10inch set that sold for $375. The next year, as NBC began moving its radio stars onto television, Sarnoff became chairman of RCA’s board.
TV blossomed during the 1950s, and both RCA and NBC took full advantage of the medium. They also capitalized on the budding move to color by trumping CBS, which was first to offer it, and introducing technology that was adopted as the industry’s standard. A few months after NBC broadcast the first live color program—the 1954 Tournament of Roses Parade—RCA’s first color set became available. The 12-inch model sold for $1,000 but its appeal was strong. Within five years a half-million such sets had sold and NBC’s Bonanza, TV’s most popular show, was airing in color. By 1962, two-thirds of all TV was “colorcast.”
By 1970, television was omnipresent and color was commonplace. RCA brought back a little pizzazz by beaming America’s space flights into the homes of enthusiastic viewers. Its technological moves also included a joint venture with old friend Thomson of France to produce innovative picture tubes. RCA would change forever during the following year, though, when leading light David Sarnoff died at age 80.
Product advances continued during the 1970s, such as the ColorTrak TV and a four-hour home videocassette recorder. RCA also marked a quarter-century in the color television business in 1979 by producing its 100 millionth picture tube. Around the same time, the company partly responsible for its existence had become a nationalized Frenchowned firm called Thomson S.A. Operated as a holding company with more than 115 subsidiaries, it derived more than half its sales from high-tech enterprises.
General Electric reacquired RCA (including NBC) in 1986 for $6.4 billion in what was the largest non-oil company merger. Many of the assets it procured did not fit its master plan, however, and the following year it sold the RCA and GE consumer electronics businesses to Thomson. The French firm then created a Thomson Consumer Electronics subsidiary to run them. In the early 1990s it set up American headquarters in Indianapolis, and in 1995 changed the division’s name to Thomson Multimedia.
RCA’s share of North American TV sales, which had been slumping, rose slightly under the new ownership. The company also introduced an audio line based on the emerging popularity of musical compact discs, and by the mid-1990s was second only to Sony in the field. Additional products, such as a 56-inch television, advanced camcorders, and high-definition TVs, also were added to the line.
Despite its innovations and heritage, Thomson Multimedia struggled initially and its parent tried unsuccessfully to unload it. By the turn of the century, however, it seemed to be turning everything around. In 1999 the American operations—of which RCA and GE comprised the majority of sales—tallied $224 million in profits, up a remarkable 1,400 percent from the year before. A primary factor was the consistent introduction of appealing new products after years of stagnation, as RCA’s once and future owner renewed the pioneering spirit that had made it a force in the first place.