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NBC is the father of network radio, and it in turn has a father, Radio Corp. of America. NBC was founded to make money for the parent, not for itself. In the pioneering days of 1926 when RCA's General Manager David Sarnoff (now its president) used WEAF (New York) as a nucleus to form the Red network and a year later, when WJZ (New York) was acquired to start the Blue, RCA hoped that network broadcasting would promote the sale of enough RCA radio sets to be worth its cost. But there were other manufacturers in the set business and they profited mightily from the sales promoted by RCA's network venture. So, it was well for its parent corporation that NBC had got into the advertising business in a big way. NBC had gross sales of $3,760,010 in 1927, increased them by 133.5% to $8,780,333 the next year, has risen steadily except for a 19.1% setback in 1933 to a 1937 gross of $38,651,286. Throughout NBC history more of this money has come from the Red network than from the Blue. The Blue, like MBS, shares many stations with the Red and cannot blanket the U. S. during hours when the Red is fully sold.
Not unlike its Radio City headquarters, NBC is both lavish and austere, has always kept a stern and watchful eye on its sponsors, luxuriates in the prestige of its two networks, its twelve-year antiquity. Although month by month through 1938 the Blue network gross revenues have fallen below last year's figures, the Red has topped its 1937 totals consistently, pulled the gross for both networks for the first eight months of this year 5.8% above 1937's first eight months.
NBC does not hold time under contract for a sponsor for more than 90 days before he begins using it. Although theoretically an NBC client can take a 90-day holiday from the air with guaranteed return to his old time by signing a contract for his new season before he closes his old, actually NBC accepts no obligation to allow him to sign such a contract, refuses any holiday if another bidder is ready to take the network spot for earlier use. So holders of desirable NBC air spots either sponsor year-round shows or else air through the summer slump less costly substitute programs. Sole important exception this year was Maxwell House Coffee. It took its Good News program off the air in the spring, but has since returned to the Red network. Such popular favorites as the Chase & Sanborn Hour, the Rudy Vallée Hour, and Kraft Music Hall have taken no summer holidays. Others (Comedians Jack Benny, Fred Allen) are returning to spots held for them by substitute programs.
The last quarter's new business is made up of such shows as Phillips Lord's Seth Parker, revived by the Vick Chemical Co., a program on which Pepsodent will star Comedian Bob Hope, musical varieties in which Grove's Bromo-Quinine brings Fred Waring and His Pennsylvanians who back to were radio. with But NBC last three fall big — sponsors General Motors, Packard, Pontiac — have not yet signed back on. NBC's President Lenox Riley Lohr is watching the automobile industry with peculiar interest. Should these motor makers feel like picking up a microphone before year's end, President Lohr could show parent corporation RCA a 1938 gross income which would not only be a new high, but a spectacularly lofty one.