WEBVTT - RCA Goes Off The Air 0:00:04.120 --> 0:00:07.520 Welcome to Business on the Brink, a production from I 0:00:07.680 --> 0:00:14.080 Heart Radio and how stuff Works. When last we left off, 0:00:14.120 --> 0:00:17.159 the Radio Corporation of America or our CIA had just 0:00:17.239 --> 0:00:19.799 become the r c A Corporation, so I guess it 0:00:19.880 --> 0:00:24.480 was the Radio Corporation of America Corporation. President David Sarnoff 0:00:24.560 --> 0:00:27.600 was relying on a combination of innovations and ruthless business 0:00:27.600 --> 0:00:31.600 strategy to tune in to success. Ultimately, our CIA would 0:00:31.600 --> 0:00:35.000 grow into an enormous company with its proverbial fingers in 0:00:35.120 --> 0:00:40.960 many proverbial pies yumpie, until the when another company would 0:00:40.960 --> 0:00:43.440 put a stop to it. This is our CIA in 0:00:43.520 --> 0:00:56.000 Business on the Brink. Hey everyone, I'm Jonathan and I'm Ariel, 0:00:56.200 --> 0:00:59.000 and we're going to continue our story with our c 0:00:59.240 --> 0:01:01.320 A as we jin. So if you have not heard 0:01:01.480 --> 0:01:04.560 the previous episode, you should probably go do that because 0:01:04.600 --> 0:01:06.120 it will it will set the stage for what was 0:01:06.160 --> 0:01:10.679 about to happen. But we had just talked about how 0:01:10.720 --> 0:01:13.920 our CIA had become its own independent company after being 0:01:13.959 --> 0:01:18.959 sort of a mutual partnership among many big big companies 0:01:19.000 --> 0:01:21.280 like General Electric and Westinghouse. And we left off in 0:01:21.280 --> 0:01:24.480 the year nineteen two. So we're gonna jump to nineteen 0:01:24.520 --> 0:01:31.559 thirty four because this is when one of our CIA's properties, NBC, 0:01:32.319 --> 0:01:35.560 the the at that point, the radio network it was 0:01:35.640 --> 0:01:40.120 before TV networks, was the subject of some scrutiny. The 0:01:40.200 --> 0:01:45.240 Mutual Broadcasting System said that NBC and CBS were essentially 0:01:45.240 --> 0:01:48.800 a d wopoly, that these two networks of radio stations, 0:01:49.040 --> 0:01:52.040 we're making it very difficult if you want to operate, 0:01:52.080 --> 0:01:56.160 say an independent radio station, and the f c C, 0:01:56.600 --> 0:02:01.680 the Federal Communications Commission said yeah. So they went up 0:02:01.680 --> 0:02:06.040 to NBC, which technically was two radio networks, the Red 0:02:06.080 --> 0:02:09.280 Network and the Blue Network, and said, here's the deal. 0:02:09.800 --> 0:02:11.400 You've got to get rid of one of them. You 0:02:11.520 --> 0:02:15.040 gotta sell one of these off, pick your favorite child. Yeah. 0:02:15.120 --> 0:02:18.320 And r c A said, I'm gonna I'm gonna appeal this, 0:02:18.560 --> 0:02:22.640 and the Appeals Court said, yeah, you're gotta do it. 0:02:22.720 --> 0:02:25.440 So r c A said, I'm gonna take this as 0:02:25.480 --> 0:02:29.400 a spring court and Supreme Court said, yeah, you gotta 0:02:29.440 --> 0:02:34.119 do it. Yeah. Meanwhile, our CIA kept business going. Yeah, 0:02:34.120 --> 0:02:37.480 it was no longer tied to General Electric or Westinghouse. 0:02:37.600 --> 0:02:40.520 The Great Depression was still going on, but David Sarnof, 0:02:40.520 --> 0:02:44.120 the leader of the company was still trying to innovate 0:02:44.520 --> 0:02:48.040 and also still trying to use any kind of business 0:02:48.120 --> 0:02:52.480 method whatsoever to keep competition well under his heel. Yeah, 0:02:52.520 --> 0:02:54.160 but one of the things he was still trying to 0:02:54.200 --> 0:02:57.320 push with this TV. Right. Yeah, you had been behind 0:02:57.360 --> 0:03:03.040 the idea of electronic television since really the twenties, and 0:03:03.400 --> 0:03:07.520 UM had been funding it directly since nineteen thirty and 0:03:07.639 --> 0:03:10.200 in nineteen thirty nine, so after about a decade of 0:03:10.240 --> 0:03:14.720 research and development, they debuted an electronic television at the 0:03:14.840 --> 0:03:17.880 nineteen thirty nine World's Fair. They actually showed a live 0:03:17.919 --> 0:03:21.240 broadcast of US President Franklin Delano Roosevelt. Is he drinking 0:03:21.240 --> 0:03:25.919 a PBR? He was not those different World's Fair in 0:03:26.000 --> 0:03:30.240 the eighteen hundreds, but he was. He was giving an 0:03:30.240 --> 0:03:33.440 address live. And in fact, this was a live broadcast, 0:03:33.480 --> 0:03:38.080 so live from camera broadcast to this television. And they 0:03:38.120 --> 0:03:41.880 began our c A, the company to manufacture television sets, 0:03:42.040 --> 0:03:47.880 giant ones like sixty. Divide that by five. There you go, 0:03:48.040 --> 0:03:51.200 twelve inch TVs or well the screen was twelve inches. 0:03:51.360 --> 0:03:55.440 The television sets were enormous. Yeah, there's a piece of furniture, 0:03:55.560 --> 0:03:58.880 all those tubes in the back. These were big. This 0:03:59.040 --> 0:04:04.480 before the transistor, so very large pieces of equipment. And 0:04:04.800 --> 0:04:07.560 of course, just like we talked about in the last episode, 0:04:07.800 --> 0:04:11.760 you've gotta have stuff to show on your thing or 0:04:11.800 --> 0:04:15.320 nobody's gonna buy it. So they showed a baseball game, 0:04:15.440 --> 0:04:20.320 right they did, between Columbia University and Princeton on Princeton 0:04:20.480 --> 0:04:23.200 two to one, so not a bad game. Yeah, you 0:04:23.279 --> 0:04:27.040 gotta think that Sarnov was probably proud of that because 0:04:27.080 --> 0:04:31.520 the other university had the word Columbia, and and our 0:04:31.600 --> 0:04:37.440 c A and the company Columbia were constantly bickering with 0:04:37.480 --> 0:04:41.000 one another, fighting for domination. And then they showed a 0:04:41.000 --> 0:04:43.839 Major League baseball game after that, right November of nineteen 0:04:43.920 --> 0:04:47.200 thirty nine. It was actually a double header between two teams, 0:04:47.520 --> 0:04:51.080 the Brooklyn Dodgers and the Cincinnati Reds. Each team won 0:04:51.400 --> 0:04:55.680 one of those games, so um, if you were a 0:04:55.720 --> 0:04:58.320 fan of Cincinnati or a fan of the Brooklyn Dodgers, 0:04:58.640 --> 0:05:03.680 you were able to be happy at least half the time. Then, Uh, 0:05:03.760 --> 0:05:08.480 the networks like NBC and CBS, we're getting into television 0:05:08.560 --> 0:05:12.960 trying to push this, but it's hard getting a brand 0:05:12.960 --> 0:05:16.320 new technology off the ground, specially one that was as 0:05:16.360 --> 0:05:22.000 expensive as television's early TVs were, I mean, they were 0:05:22.040 --> 0:05:25.720 prohibitively expensive for the vast majority of consumers out there. 0:05:26.360 --> 0:05:29.560 Um And on top of that, even when the Great 0:05:29.560 --> 0:05:32.680 Depression was going to start to come to an end, 0:05:32.960 --> 0:05:36.440 something else was starting to boil up. And that's something else. 0:05:36.640 --> 0:05:41.680 Was the Second World War? Yeah, world War two. That 0:05:41.720 --> 0:05:44.200 would be it. That's the one. So yeah, they called 0:05:44.240 --> 0:05:47.000 World War one the war to end all wars, and 0:05:47.040 --> 0:05:48.840 then I guess world War two was Oops, I did 0:05:48.920 --> 0:05:54.840 it again. Yeah, Brittany, leave Brittany alone. So our c 0:05:55.040 --> 0:05:59.120 a's consumer electronics business would slow down during this time, 0:05:59.160 --> 0:06:03.600 but there was money to be made because, as it 0:06:03.600 --> 0:06:07.039 turns out, when a war is on, the military needs 0:06:07.160 --> 0:06:09.000 lots of stuff. See I thought you're going to say, 0:06:09.000 --> 0:06:11.440 when the war is on, the TV's on. Well would 0:06:11.480 --> 0:06:13.600 have been, but there was no TV yet so at 0:06:13.680 --> 0:06:17.080 least not really. So instead, our c A would start 0:06:17.120 --> 0:06:20.320 to develop technology for the military. Now most of the 0:06:20.400 --> 0:06:23.279 time it was like components that would go into larger 0:06:23.320 --> 0:06:28.559 things like radar systems and stuff. So they were really 0:06:28.600 --> 0:06:30.919 focusing on that. Um. You know, a lot of the 0:06:30.960 --> 0:06:34.080 manufacturing power of the United States was being dedicated to 0:06:34.120 --> 0:06:37.640 wartime efforts. This was across the board. If you operated 0:06:37.680 --> 0:06:41.080 a factory, chances are you were trying to land military 0:06:41.120 --> 0:06:44.920 government contracts, because otherwise you couldn't even get the raw 0:06:44.960 --> 0:06:47.880 materials you needed to make your stuff, because the U 0:06:48.000 --> 0:06:50.880 S would put, you know, very strict limitations on that 0:06:51.080 --> 0:06:54.000 everything was going to the war efforts. Yes, yes, and 0:06:54.080 --> 0:06:57.679 so uh. At this time, also during World War Two, 0:06:58.160 --> 0:07:02.120 the FCC ruling would come down in Ninette and r 0:07:02.160 --> 0:07:06.080 c A would have to split up those NBC networks, 0:07:06.080 --> 0:07:09.280 the Red and Blue Network. So a guy named Edward J. Noble, 0:07:09.560 --> 0:07:12.360 We're going to have to do an episode about Edward J. Noble, 0:07:12.360 --> 0:07:16.200 it's the point. And he had made a fortune with 0:07:16.320 --> 0:07:21.040 life savers, not the not the not the flotation device, 0:07:21.480 --> 0:07:25.360 the candy, the candy, Lifesavers. He was a lifesavers fortune. 0:07:25.720 --> 0:07:28.560 Lifesavers were his life saver. He made a lot of 0:07:28.560 --> 0:07:31.680 money on those lifesavers. So he would buy the Blue 0:07:31.760 --> 0:07:36.680 Network from NBC for the princely sum of eight million dollars, 0:07:39.040 --> 0:07:41.440 and then a couple of years later he would rebrand 0:07:41.480 --> 0:07:44.760 that network so that its official name became the American 0:07:44.760 --> 0:07:49.160 Broadcasting Company or ABC. So in the last episode, I 0:07:49.520 --> 0:07:53.160 referred to the fact that that r C as r 0:07:53.200 --> 0:07:55.679 C A pretty much played a role in the creation 0:07:56.040 --> 0:07:59.120 of three of the major networks in the United States 0:07:59.760 --> 0:08:05.200 and made NBC outright, that was its subsidiary. Uh, it 0:08:05.360 --> 0:08:09.720 inspired the creation of CBS, and then it spun off 0:08:09.800 --> 0:08:13.560 half of NBC, which then became ABC alright. But also 0:08:13.880 --> 0:08:16.560 during this time, so Sarnov was getting military contracts. What 0:08:16.560 --> 0:08:20.000 do you do with the money? Well, he was pretty 0:08:20.040 --> 0:08:22.640 I mean not just pretty smart, he was incredibly smart. 0:08:23.240 --> 0:08:27.760 He used that money to increase our CIA's manufacturing capacity. 0:08:27.640 --> 0:08:32.000 He started building out more manufacturing centers, more factories because 0:08:32.000 --> 0:08:34.400 he knew that when the war was at an end, 0:08:34.880 --> 0:08:38.000 there would be another market for consumer electronics as well 0:08:38.040 --> 0:08:42.080 as industrial equipment, and in order to meet the need, 0:08:42.640 --> 0:08:46.520 he would need better manufacturing facilities. So he was using 0:08:46.520 --> 0:08:49.319 that money. And at the time they were still making 0:08:49.360 --> 0:08:51.800 military stuff, but it was all with the eye of 0:08:51.880 --> 0:08:56.520 converting this over back to civilian applications once the war 0:08:56.679 --> 0:08:59.400 was over, which they did so they started making TV 0:08:59.480 --> 0:09:03.839 sets in forty six, Yes, so wars over the year. 0:09:03.920 --> 0:09:06.520 After the war is over, our Cia starts to really 0:09:06.559 --> 0:09:09.040 manufacture television sets. Of course, these are black and white 0:09:09.080 --> 0:09:14.200 TVs at this time, and again, like we've said before, 0:09:14.240 --> 0:09:16.200 they had to make stuff for people to watch, like 0:09:16.200 --> 0:09:19.560 those baseball games. They had to create stuff. So they 0:09:19.679 --> 0:09:22.520 essentially told NBC, which at the time again was just 0:09:22.600 --> 0:09:28.199 a radio network, to start working into television production as well. 0:09:28.679 --> 0:09:31.400 So that's when NBC started to become not just a 0:09:31.480 --> 0:09:35.920 radio network but a TV network. Meanwhile, CBS was trying 0:09:35.960 --> 0:09:38.679 to do the same thing. William Paley, who was the 0:09:38.800 --> 0:09:40.760 leader of CBS, he was the guy who had bought 0:09:40.880 --> 0:09:46.520 CBS back when it was sort of a being made 0:09:46.520 --> 0:09:49.679 in spite of NBC, so he bought it, and he 0:09:49.760 --> 0:09:52.200 was also trying to turn CBS into not just a 0:09:52.280 --> 0:09:57.840 radio network but a TV network. And uh, Paley would 0:09:57.920 --> 0:10:03.480 do something very shifty. What this is Again, we talked 0:10:03.520 --> 0:10:07.040 about in CBS the Great Talent Rate. Yes, so in 0:10:07.080 --> 0:10:10.559 that episode we mentioned how CBS was able to secure 0:10:10.600 --> 0:10:14.840 a whole bunch of very big names in radio because 0:10:15.840 --> 0:10:19.280 the general wisdom was, what's the best way to create 0:10:19.320 --> 0:10:22.000 really good TV content. Let's take the stuff we make 0:10:22.040 --> 0:10:23.880 for radio and make it for TV. And so they 0:10:23.880 --> 0:10:26.800 already had big radio stars that they could It's a 0:10:26.840 --> 0:10:30.120 whole plot point in Singing in the Rain. Yes, yeah, 0:10:30.120 --> 0:10:33.079 it's a. It's a it's one of those Hollywood stories 0:10:33.120 --> 0:10:35.640 that has made its way into different tellings because it 0:10:35.720 --> 0:10:38.840 was a big deal. So CBS came forward and offered 0:10:39.200 --> 0:10:45.160 huge contracts, really really lucrative contracts to stars like George 0:10:45.160 --> 0:10:48.720 Burns and Gracie Allen, who were a duo at the time. 0:10:48.760 --> 0:10:51.600 You had Jack Benny. You had these big, big names 0:10:51.600 --> 0:10:55.000 in radio who were starting to make the transition to television, 0:10:55.280 --> 0:10:57.160 and CBS is, why don't you go and work for 0:10:57.240 --> 0:10:59.320 us for a while, And they said sure, because these 0:10:59.400 --> 0:11:03.840 are great contract and NBC was not happy. No. Sarnoff 0:11:05.400 --> 0:11:10.280 he really liked to put his pressure on other companies. 0:11:10.360 --> 0:11:12.319 He did not like it when the same was done 0:11:12.360 --> 0:11:17.439 to him, so he got really upset. And apparently it 0:11:17.640 --> 0:11:23.319 really illustrated the difference between Sarnoff's leadership style and philosophy 0:11:23.360 --> 0:11:28.560 and Paley's leadership style philosophy. So Sarnoff reportedly he hated 0:11:28.600 --> 0:11:31.239 the idea of advertising. He thought of it as vulgar. 0:11:31.520 --> 0:11:33.959 He didn't like he didn't like running ads on his 0:11:34.200 --> 0:11:36.480 and he certainly didn't like having to meet with ad 0:11:36.480 --> 0:11:39.160 executives that was beneath him. So he would send direct 0:11:39.200 --> 0:11:43.959 reports to those meetings whereas Paley was like this very gregarious, 0:11:44.000 --> 0:11:47.959 outgoing guy who was happy to bring people in and 0:11:48.040 --> 0:11:53.280 have them be part of the whole situation of uh 0:11:53.480 --> 0:11:56.839 joining in and and and having a conversation about how 0:11:56.840 --> 0:11:59.880 can we get your ads on your network? So Paley 0:12:00.120 --> 0:12:05.920 was um, the like polar opposite of s. Yeah, but Pley, 0:12:05.960 --> 0:12:08.600 it seems like Paley won that battle. He did win 0:12:08.679 --> 0:12:13.200 that particular battle. Yeah, all right, So what does our 0:12:13.240 --> 0:12:15.679 c A do next? So you remember I told you 0:12:15.720 --> 0:12:19.280 they had established that movie theater chain and they had 0:12:19.320 --> 0:12:24.600 created a movie studio r k O Pictures, and this 0:12:24.720 --> 0:12:28.680 was all in an effort to get their audio technology 0:12:28.760 --> 0:12:32.280 into theaters to create the standard. Well they they achieved that. 0:12:32.640 --> 0:12:35.000 So once they achieved that, they're like, well there's no 0:12:35.040 --> 0:12:37.640 reason for us to keep this movie business anymore. Too 0:12:37.760 --> 0:12:40.719 much diversification. So they sold it, and you know they 0:12:40.800 --> 0:12:43.640 sold it to because I got it in the nets. Yes, 0:12:43.880 --> 0:12:46.760 another person will have to do an episode about That'll 0:12:46.800 --> 0:12:50.720 be a truly eccentric episode, because when you have when 0:12:50.720 --> 0:12:53.720 you're that rich, you get to be eccentric. Okay, So 0:12:53.760 --> 0:12:56.360 you have this note in where we get to the 0:12:56.400 --> 0:12:59.040 speed Wars and I'm so excited to hear about how 0:12:59.080 --> 0:13:02.920 they got into the the bus industry. It's not yeah, 0:13:03.000 --> 0:13:09.600 you have to explodes. No, this has to everything to 0:13:09.640 --> 0:13:14.079 do with turntables. All right, I'm gonna make this super fast. 0:13:15.640 --> 0:13:18.600 In the beginning, you had turntables that would play music 0:13:18.640 --> 0:13:21.160 at seventy eight revolutions per minute, so the discs would 0:13:21.160 --> 0:13:24.760 turn seventy eight times every sixty seconds. R c A 0:13:24.840 --> 0:13:27.520 tried to introduce a thirty three and a third RPM 0:13:27.559 --> 0:13:30.520 album about a decade earlier, but it was during the 0:13:30.520 --> 0:13:34.079 Great Depression. Nobody butt it. Then Columbia, r c S 0:13:34.160 --> 0:13:38.360 great rival comes up with two big things that help 0:13:39.240 --> 0:13:43.800 change that. First, they start making records out of vinyl 0:13:44.080 --> 0:13:46.680 as opposed to shellak, which is a much harder material. 0:13:47.240 --> 0:13:49.840 Vinyl is much easier to work with. And they come 0:13:49.920 --> 0:13:52.679 up with micro grooves, which means you could fit more 0:13:52.840 --> 0:13:57.280 grooves per side of the disc, which means more audio, yeah, 0:13:57.360 --> 0:14:01.160 more grooves yeah. So So it used to be that 0:14:01.200 --> 0:14:04.240 you can only fit like five minutes on one side 0:14:04.240 --> 0:14:07.320 of a seventy eight album. They were able to fit 0:14:07.960 --> 0:14:09.640 way more than that on a thirty three and a 0:14:09.720 --> 0:14:13.079 third album, which was about the same size in dimensions 0:14:13.120 --> 0:14:17.840 as the old seven eights. Now Columbia said, we're willing 0:14:17.880 --> 0:14:21.040 to license this design to you, r c A, because 0:14:21.080 --> 0:14:26.080 you make turntables, you make discs. We'll we'll license this 0:14:26.160 --> 0:14:30.320 to you. Starna does not like ever having to deal 0:14:30.560 --> 0:14:33.640 with somebody else's intellectual property. He wants to own it all, yeah, 0:14:33.760 --> 0:14:36.360 or or he wants to license it to somebody else exactly. 0:14:36.560 --> 0:14:38.440 He wants to be on the other side of that deal. 0:14:38.800 --> 0:14:43.360 So Starna says, pounds sand Columbia, and so he creates. 0:14:43.520 --> 0:14:47.080 He directs our Cia to create their own format, which 0:14:47.120 --> 0:14:51.560 is a forty five RPM album, and they're smaller. They're like, 0:14:51.680 --> 0:14:54.280 you know, a seven inch disc as opposed to the 0:14:54.360 --> 0:14:56.000 thirty three and a third, which is like a twelve 0:14:56.000 --> 0:14:58.240 inch disk. So it can't hold as much music then 0:14:58.360 --> 0:15:00.600 it can't. It holds about as much as old seventy 0:15:00.600 --> 0:15:03.880 eights do. So this is what would be used for singles, right. 0:15:03.960 --> 0:15:05.920 You would get a single on one side and then 0:15:05.960 --> 0:15:08.400 you have the B side, whereas the thirty three and 0:15:08.440 --> 0:15:11.120 a third would create the concept of the long playing 0:15:11.320 --> 0:15:14.920 or LP album. And you had these two formats going 0:15:14.960 --> 0:15:17.880 to war with one another. Eventually you had third party 0:15:17.920 --> 0:15:21.640 manufacturers that would make turntables that could work at either speed. 0:15:21.840 --> 0:15:23.920 So that's what would allow you to play either a 0:15:23.960 --> 0:15:26.080 forty five or thirty three and a third. You just 0:15:26.120 --> 0:15:28.480 had to select the right speed because I don't know, Ariel, 0:15:28.520 --> 0:15:31.360 have you ever played with a record player? I have, 0:15:31.840 --> 0:15:34.080 you're younger than I am. I just had to ask. Now, 0:15:34.080 --> 0:15:36.360 I didn't know all that technical mumbo jumbo behind it, 0:15:36.440 --> 0:15:38.760 but you know that's interesting, mambo jumpo. You know that 0:15:38.800 --> 0:15:41.480 if you put say a forty five, but you set 0:15:41.520 --> 0:15:43.440 it to three three and a third, it's not going 0:15:43.480 --> 0:15:46.840 to sound right. It's going to be slow and low pitched. 0:15:46.960 --> 0:15:48.400 If you put a thirty three in the third and 0:15:48.440 --> 0:15:51.480 you set forty five, it's gonna be like the children. Yeah. 0:15:52.040 --> 0:15:54.640 So these were the speed wars, and the two companies 0:15:54.680 --> 0:15:58.480 would maintain this kind of adversarial approach for the next 0:15:58.520 --> 0:16:03.160 several years. All too lee. They would both kind of 0:16:04.120 --> 0:16:07.840 settle with each other and agree to make and they 0:16:07.840 --> 0:16:12.040 would agree to make records in the other formats. But 0:16:12.160 --> 0:16:14.960 it was ugly like these were two big companies that 0:16:15.000 --> 0:16:19.760 were both vying to become the name in that particular industry. 0:16:19.800 --> 0:16:22.480 But I mean Columbia Records eventually wins that war, right, Yeah, 0:16:22.480 --> 0:16:24.800 I mean they thirty three and a third became like 0:16:24.960 --> 0:16:27.440 the go to and then you would have these singles 0:16:27.440 --> 0:16:29.680 on forty five. So it was kind of this weird 0:16:29.760 --> 0:16:34.000 world where both were able to coexist. But I think Columbia, 0:16:34.040 --> 0:16:37.440 because it created the micro grooves, really had the big advantage. Also, 0:16:37.720 --> 0:16:40.160 their format came out about a year before our CNA 0:16:40.200 --> 0:16:42.880 is they're also fighting on television. On the television front, right, 0:16:43.440 --> 0:16:46.320 cool boy, Yeah, we'll get into that. In fact, let's 0:16:46.560 --> 0:16:48.560 let's take a quick break, but when we come back, 0:16:48.920 --> 0:16:51.760 we'll talk about how Columbia and r c A put 0:16:51.880 --> 0:17:00.560 up a really good fight on that front. So we 0:17:00.640 --> 0:17:03.080 had just talked about how they were going to have 0:17:03.360 --> 0:17:06.399 this big fight in television. Specifically, it was going to 0:17:06.440 --> 0:17:10.080 be in setting the standard for color TV. Just as 0:17:10.440 --> 0:17:14.280 David Sarnov wanted to set the standard for audio on film, 0:17:14.600 --> 0:17:17.719 he wanted to set the standard for color television. Now, 0:17:17.760 --> 0:17:21.920 at first they started making what we're called mechanical color TVs. 0:17:22.119 --> 0:17:25.280 There was one element inside the television that was on 0:17:25.320 --> 0:17:29.080 a mechanical basis, not an electronic one. There's literally a 0:17:29.119 --> 0:17:35.440 color wheel inside the TV sets. This had a disadvantage. 0:17:35.440 --> 0:17:39.160 They'll get into in a second. But Columbia shows off 0:17:39.240 --> 0:17:44.000 their version of this, the CBS Columbia version of color TV, 0:17:44.600 --> 0:17:47.520 and it's a pretty good quality. Our c A shows 0:17:47.560 --> 0:17:50.680 off their's and there's just wasn't quite as good as 0:17:50.880 --> 0:17:56.200 CBS is. So the you then have the FCC deciding 0:17:56.280 --> 0:17:58.920 what's going to be the standard, and they say CBS 0:17:59.000 --> 0:18:00.760 is going to be the standard, but US it's a 0:18:00.800 --> 0:18:03.520 better picture, so we're gonna go with CBS's approach to 0:18:03.520 --> 0:18:08.520 color television was not super happy, not even a little bit. 0:18:08.960 --> 0:18:12.600 But he had a couple of advantages on his side. 0:18:12.800 --> 0:18:16.560 One was that he had already been dedicating some resources 0:18:16.560 --> 0:18:19.320 in our c A to create an electronic version of 0:18:19.359 --> 0:18:22.520 color TV. It just wasn't ready at the time when 0:18:22.920 --> 0:18:26.639 the FCC was making this decision. The other advantage was 0:18:26.680 --> 0:18:31.040 that this mechanical color TV was not compatible with the 0:18:31.119 --> 0:18:35.920 already existing black and white broadcasts. Yeah, that is a problem. Yeah, 0:18:35.960 --> 0:18:39.040 we if you're told, hey, you can buy this brand 0:18:39.040 --> 0:18:43.040 new TV, um Sadly, nothing that's showing today will show 0:18:43.080 --> 0:18:46.080 on your TV, but future shows will if we can 0:18:46.160 --> 0:18:49.200 sell enough of these. That's not a great yeah. Yeah, 0:18:49.240 --> 0:18:51.560 if yeah, you have to convince people that you're gonna 0:18:51.560 --> 0:18:55.399 sell enough to make the content right. Well, that was 0:18:55.440 --> 0:18:59.159 not a good enough market proposition for consumers to go 0:18:59.200 --> 0:19:02.200 out and buy this brand new, very expensive color TV. 0:19:03.240 --> 0:19:09.360 And at the same time, there was another UH problem 0:19:09.480 --> 0:19:12.240 that was coming up. There was the Korean War, which 0:19:12.280 --> 0:19:14.480 was making it harder for CBS to even get the 0:19:14.520 --> 0:19:17.679 components needed to make its color televisions. It would end 0:19:17.760 --> 0:19:21.280 up only making a couple of hundred and it just 0:19:21.480 --> 0:19:25.760 never really took off. Then Starnoff essentially said, well, I've 0:19:25.760 --> 0:19:29.720 got this electronic color television solution that was ready a 0:19:29.720 --> 0:19:32.800 couple of years later, shows it to the FCC and says, 0:19:32.920 --> 0:19:35.280 here's the advantage of mine. You can still watch the 0:19:35.320 --> 0:19:37.640 old black and white stuff on here because it's using 0:19:37.680 --> 0:19:40.520 the same methodology. It's just got if you are able 0:19:40.560 --> 0:19:42.119 to show it in color, it will show it in 0:19:42.160 --> 0:19:44.720 color well. And then he made cameras to produce some 0:19:44.800 --> 0:19:47.239 materials as well. Yes, and that was another advantage. Our 0:19:47.280 --> 0:19:50.359 c was in the business of both sides, both the 0:19:50.400 --> 0:19:55.280 camera side and the screen side, so effectively our c 0:19:55.440 --> 0:19:59.800 A would get the color television standard. Essentially, there was 0:19:59.840 --> 0:20:03.199 a committee that was formed actually technically reformed the National 0:20:03.280 --> 0:20:06.960 Television System Committee in t SC and they created the 0:20:07.000 --> 0:20:09.800 standard for color TV and it was almost exactly our 0:20:09.880 --> 0:20:12.960 c A specification. Yeah, but it took it still took 0:20:12.960 --> 0:20:15.000 a long time for color TV to replace black and 0:20:15.000 --> 0:20:19.879 white TV decades. Yeah, it was, so it was available. 0:20:19.920 --> 0:20:21.480 The first r c A set was the c T 0:20:21.680 --> 0:20:25.080 one hundred, which cost a thousand dollars in nineteen fifty four, 0:20:25.080 --> 0:20:28.480 which would be about ten grand today. That's a extra 0:20:29.000 --> 0:20:31.840 that's an extra, luxury, luxury idea. Yeah, no, I just 0:20:32.160 --> 0:20:36.439 I can't imagine dropping ten ten g's on a television. Uh, 0:20:36.800 --> 0:20:39.239 I can imagine dropping a ting g television and then 0:20:39.280 --> 0:20:43.280 immediately wanting to hide somewhere. But anyway, it was, it 0:20:43.359 --> 0:20:45.600 was an It meant that no one was able to 0:20:45.600 --> 0:20:49.160 buy one, and because the black and white sets were 0:20:49.200 --> 0:20:52.280 still good for a while, it wouldn't be until really 0:20:52.359 --> 0:20:55.359 the nineteen seventies that you started seeing color TV. So 0:20:55.440 --> 0:20:58.240 I'm guessing I'm guessing they still had to work on 0:20:58.280 --> 0:21:01.400 their radio side of things as well. They did. And 0:21:01.480 --> 0:21:04.720 here's where we get into another dark story and Sarnoff 0:21:04.920 --> 0:21:09.359 being the ruthless businessman that he was, So Sarnov had 0:21:09.400 --> 0:21:13.479 a friend and the effective word there was had a 0:21:13.520 --> 0:21:17.800 friend named Edwin Howard Armstrong, and Armstrong came up with 0:21:18.119 --> 0:21:23.320 a methodology for transmitting radio through what was called frequency 0:21:23.400 --> 0:21:27.920 modulation or FM, whereas a M, which was the standard, 0:21:28.200 --> 0:21:32.360 was amplitude modulation. AM has some great advantages that can 0:21:32.400 --> 0:21:36.040 go really really far, like those broadcasts can travel great distances, 0:21:36.200 --> 0:21:38.520 but they can't penetrate through stuff so well, So if 0:21:38.520 --> 0:21:40.880 you lived in a city, you could have trouble picking 0:21:40.960 --> 0:21:44.119 up a M stations. FM didn't have those problems, but 0:21:44.200 --> 0:21:48.560 it had a much smaller range of broadcast. So Armstrong 0:21:49.400 --> 0:21:53.320 and our c A had worked out an agreement way 0:21:53.359 --> 0:21:57.440 back when that r c A would get the right 0:21:57.480 --> 0:22:00.840 of first refusal if Armstrong came up with something that 0:22:00.960 --> 0:22:04.400 was workable using FM, and Armstrong did so, he goes 0:22:04.440 --> 0:22:07.119 to our c A and he says, I've got this 0:22:07.280 --> 0:22:11.440 FM technology. It would require having to invest in all 0:22:11.480 --> 0:22:15.000 new equipment because FM transmission and a M are not 0:22:15.400 --> 0:22:18.240 compatible setting up new stations exactly. Yeah, you'd have to 0:22:18.280 --> 0:22:20.840 build out a whole new infrastructure for this to work. 0:22:20.880 --> 0:22:24.679 But it will work. So our c A looks at 0:22:24.720 --> 0:22:28.800 this and says, well, we're really dedicating our resources right 0:22:28.800 --> 0:22:34.400 now to trying to get television going exactly, so I'm 0:22:34.400 --> 0:22:37.360 trying can go elsewhere? Yes, exactly, Yes, you're you're way 0:22:37.400 --> 0:22:40.119 ahead of me. Armstrong goes, he makes some agreements with 0:22:40.160 --> 0:22:43.199 some other folks, and then our CIA says, you know what, 0:22:43.320 --> 0:22:45.600 on second thought, we totally do one that FM thing. 0:22:45.720 --> 0:22:48.640 But you know you gave us the right at first refusal. 0:22:48.840 --> 0:22:52.439 That's all good. So let's have an agreement where you 0:22:52.440 --> 0:22:56.640 will license the technology to US royalty free, so you'll 0:22:56.640 --> 0:23:00.760 get a flat fee for your technology, but it will 0:23:00.800 --> 0:23:03.879 be non exclusive, so you'll be able to still go 0:23:03.960 --> 0:23:07.080 to these other parties and use your FM technology. There 0:23:07.160 --> 0:23:10.840 seem fair to the other parties who opted in first. Yeah, 0:23:10.880 --> 0:23:14.960 and they were already opted into paying royalties. And Armstrong said, 0:23:15.080 --> 0:23:17.520 you know, it's I don't feel good about making that 0:23:17.600 --> 0:23:20.560 deal because if I say to you, yes, you get 0:23:20.600 --> 0:23:23.760 this royalty free, whereas everybody else has to pay royalties, 0:23:23.800 --> 0:23:26.720 that seems like it's not terribly fair. So he said, 0:23:26.920 --> 0:23:29.680 you know, I don't think this is going to work out. 0:23:30.200 --> 0:23:34.840 And Starnoff did not react well to being turned. It 0:23:34.840 --> 0:23:37.760 doesn't seem like he does that very often, like Sarnof, 0:23:38.080 --> 0:23:41.600 like getting his own way. Yeah, so uh so he 0:23:41.680 --> 0:23:46.520 makes his own technology. Yes, he pushes our c A 0:23:46.800 --> 0:23:50.880 Research and Development to develop their own FM technology, and 0:23:51.359 --> 0:23:54.280 they wanted to have at least enough plausible deniability to 0:23:54.400 --> 0:23:58.159 say that they did this completely independently of Armstrong and 0:23:58.200 --> 0:24:02.200 that none of their technology violated any of the patents 0:24:02.280 --> 0:24:08.120 that Armstrong held. Yeah, I mean, we've seen instances where 0:24:08.119 --> 0:24:11.560 companies have reverse engineered things and they've made their own 0:24:11.680 --> 0:24:14.280 version of stuff, and they or they'll they'll look at 0:24:14.280 --> 0:24:17.119 a patent and they'll be very careful to try and 0:24:17.200 --> 0:24:20.679 get the same result without infringing on the patent. But 0:24:20.760 --> 0:24:23.760