In 1926, inspired by the vision of RCA's David Sarnoff, Westinghouse, GE and RCA combined to purchase WEAF in New York and launch a network of radio stations called the National Broadcasting Company.
As head of RCA (the Radio Corporation of America) David Sarnoff was in the business of selling radios. He understood that content would do the job for him. A network would link content and people on a national scale, which, as I'm sure he discovered later, would help control quality, create a sense of shared experience among audiences and provide new and important outlets for national advertisers. In 1927 The Rose Bowl game was broadcast across the country thanks to the more than 25 stations in the NBC network.
Now, raise your hand: Who knew that RCA brought forth NBC? For that matter, raise your hand: Who had heard of RCA?
According to the history available at RCA.com, it was only a little more than 30 years before David Sarnoff and friends founded NBC that Guglielmo Marconi transmitted the first wireless signal. In the years following his discovery wireless evolved into radio with the help of countless inventors and investment from many sources, including the United States government, which assumed control over all wireless operations during World War I. RCA was formed in October 1919 by General Electric to market radios to the public. In 1920, another partner, Westinghouse, received the first commercial broadcasting license.
Not many people could have imagined at the turn of the last century, or even later, the idea of sound coming to them over the air in the manner wireless technology made possible. Delighted and captivated, the number of in-home radio sets would grow from 5,000 in 1920 to 2.5 million in 1924.
This is all strangely familiar to those of us who labor online, including the role of the government. We know the pattern: technical breakthrough, rapid adoption, dominant technology culture, developing media proposition. It seems clear what comes first and it seems equally clear, looking side-by-side at RCA and NBC, what endures:
In an irritable moment nearly two years ago I wrote Richard Parsons, CEO of Time Warner, a letter. This is what I wrote, in part:
Dear Mr. Parsons:
I thought I would write you directly to offer a solution that I believe would reshape AOL's future and add richness to the Internet marketplace, overall. This is about leadership at a time when everyone could benefit from it.
Here is what I would propose:
- Abandon the idea of AOL being a gateway to anything online and pull down the garden walls. Release most of your editors and writers and recycle them elsewhere within the AOL Time Warner organization. A visit to aol.com in the future will yield little of value except sign-up information for Internet access (dial-up or broadband), company address and contact information;
- Free your subscribers. Since there is nothing of value left at aol.com (per the above) there is little reason to take money from subscribers for content. Refund amounts due and emancipate them;
- Aggressively offer broadband and dial-up service (unattached to any content strategy) as the preferred alternative to capturing subscriber revenue without creating a corresponding content burden on the company;
- Announce the AOL Network, an affiliation of 10,000 (more or less, but growing over time to tens of thousands) independent Web sites that have signed exclusive joint marketing arrangements with AOL to sell advertising and market content, worldwide. Each site will be required to host an AOL branded watermark in the upper right corner as a testament to the association, but otherwise retain full editorial control over the look and feel of their individual Web properties as well as responsibility for promoting and attracting traffic. AOL's role in this relationship is to vet the sites for quality (size doesn't matter) sell the advertising, syndicate the content, traffic the materials and collect a fee. AOL Time Warner offline properties could certainly be part of this network.
I never heard back, although one of my partners, with whom I'd shared this missive, noted ruefully this summer -- after AOL acquired Advertising.com for about $500 million -- that Mr. Parsons clearly read the letter.
Today, of course, the National Broadcasting Company, despite its iterations online and offline, is not a network. It is a portal, and portals are an exhausting and inefficient business.
Television created portals, ultimately transforming networks into factories gushing out programs and sucking in audience. More programming for more audience. Faster, cheaper, broader. Not different places linked together, but different places dissolved into one. Which is why the Internet was such good news to a population yearning to escape the gravitational pull of these giant places.
AOL has figured this out, hence the push past the garden walls and the emerging AOL Network. So has Google. Hence Google AdSense. Yahoo! is increasingly ambitious in the area of content syndication. The technology companies online, too, have estimated that they need distribution. They need a network. They cannot scale their businesses relying on portals. Nor can media buyers, as research that came out in the last few weeks from DoubleClick and comScore Media Metrix confirmed. Portals -- like TV -- "overreach."
In contrast, networks provide a solution for efficient reach to buyers trying to pinpoint their most important customers in targeted environments.
In 1926 David Sarnoff's radio network linked a nation, which must have seemed as big and diverse as the Internet seems to us today. His network grew and evolved, and begat other networks, to a point that they nearly define us as a culture today. Certainly, they have defined our early steps online as we have sought all at once to emulate their gravity and control with investments into centralized, portal-like content.
Looking ahead it's hard to conceive of taming the vast, global Internet landscape in a manner similar to how the media behemoths did in the last century. Looking back, however, it may be useful to note that the network was the model.
G. Jarvis Coffin III is a co-founder of BURST! and has served as its President and Chief Executive Officer since its inception in October 1995 and as a Director since January 2000.
Founded in 1995, BURST! Media, is an Internet ad services and online ad sales rep company that delivers more than 2.4 billion advertising impressions for over 2,000 Web publishers every month. BURST! reaches one in four people online and is the 20th largest online media property in terms of unique visitors and reach making it one of the largest online ad companies in the U.S. In the first half of 2004, BURST's ad sales were 86+ percent ahead of the same period last year. Moreover, each successive month of the year has seen accelerated growth over the previous month, making the second half look every bit as promising. Total ad impressions served increased by 13.2 percent to 17.7 billion impressions.
BURST's total audience (measured in monthly unique users) out-pacing the Internet's growth by about 27 percent. While the Internet grew 6.7 percent in number of total uniques (June 03 vs. June 04) BURST! growth in uniques was 8.5 percent for that same time period.
From September 1993 to October 1995, Mr. Coffin worked at the Los Angeles Times where he was Director of National Advertising. Prior to that, Mr. Coffin was Vice President of Sales at Business Week from September 1991 to September 1993. From 1985 to 1991, Mr. Coffin was employed at USA Today, where he held various positions, including Director of Northeastern Sales. He began his advertising career in 1979 at Dancer Fitzgerald Sample in New York. Mr. Coffin has been a member of the Advertising Club of New York and the Lantern Club of Boston and was Chairman of the Newspaper Association of America's Committee on Financial Advertising. Mr. Coffin obtained a B.A. in Political Science from Hobart College.