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Entrance into the theatrical field resulted partly from the invention of Photophone, the talking cinema mechanism perfected by Westinghouse and General Electric engineers, and partly from Radio Corp.'s realization of the potential profits in electrical entertainment on the largest possible scale. R. C. A. Photophone, Inc. was incorporated in 1927, functioned for the sale and distribution of Photophones. In January 1928, the Keith-Albee and Orpheum theatre circuits merged, the combination also acquiring control of F. B. O. Pictures Corp., cinema producer and distributor. In October 1928, the Keith-Albee-Orpheum combination sold control to Radio Corp. and Radio-Keith-Orpheum, a holding company, was formed. KAO lost money in 1928. The RKO management, with David Sarnoff as Board Chairman, showed an operating profit of $181,373 for the first quarter of 1929.
Ramifications of Radio Corp. in entertainment are best shown by noting what Radio Corp. can (and doubtless will) do to "plug" (exploit) its entertainers. Example: Rudy Vallee, singer and orchestra leader, will soon be seen and heard in a Radio talkie. He can make Radio-Victor records of the featured songs. He can broadcast them over National Broadcasting Co.'s chain of 53 stations (N. B. C. is 50% owned by Radio Corp.). He can appear at RKO theatres. Cinema, radio, phonograph, vaudeville—Radio Corp. is very much in them all.
As to the communications business, only the White Act keeps Radio Corp. from turning its entire message service over to International Telephone & Telegraph. In March, R. C. A. Communications, Inc. was tentatively sold to the Behn Brothers for 100 million dollars but the White Act, prohibiting cable and wireless mergers, must be amended or rescinded before I. T. & T. can take over R. C. A. C.
Board Chairman of Radio Corp. is Owen D. Young. President of Radio Corp. is Major General James Guthrie Harbord. Active manager, busy nerve-centre of so much merging and intricacy, is David Sarnoff, Vice President and General Manager. Born in Uzlian, Minsk, Russia, on a cold winter's day in 1891, Mr. Sarnoff arrived in the U. S. in 1900. He delivered meat, sold newspapers, sang in a choir. His parents hoped he would become a rabbi. At the age of nine he had been studying the Talmud for three years. In 1906 Sarnoff Sr. died. In the same year young David got a $5 job as messenger boy with Commercial Cable Co. He saved $2, bought a telegraph instrument, soon was a junior telegraph operator with the old American Marconi.
He was wireless operator at John Wanamaker's in 1912. When the Titanic sank, he stayed on the job for 72 hours getting the record of the disaster, the list of survivors. When Radio Corp. absorbed American Marconi, Mr. Sarnoff, the Commercial Manager, retained his position. He became General Manager in 1921, Vice President in 1922. Now he is a world figure. While his great and good friend, Owen D. Young, was formulating the famed Young Plan in Paris, he, conscientiously in the background, gave potent aid.