History of CBS
CBS was founded as a radio network in 1927 and then expanded to television in the 1940s. Although it primarily remained an independent, publicly traded company throughout most of the 20th century, Paramount Pictures temporarily held a 49% ownership stake from 1929 to 1932. However, in 1995 the Westinghouse Electric Corporation acquired the company, becoming CBS Corporation. In 2000, CBS sold again to the original incarnation of Viacom. In 2005, Viacom split itself into two separate companies and re-established CBS Corporation. However, National Amusements controlled both CBS and the second incarnation of Viacom until 2019, when both companies agreed to re-merge to become ViacomCBS. In 2022, ViacomCBS changed its name to Paramount Global after Paramount Pictures. In 2025, Paramount Global, National Amusements and Skydance Media merged to form Paramount Skydance Corporation.
Early radio years
The origins of CBS date back to January 27, 1927, with the creation of the United Independent Broadcasters network in Chicago by New York City talent agent Arthur Judson. The fledgling network soon needed additional investors, and the Columbia Phonograph Company, manufacturers of Columbia Records, rescued it in April 1927. Now the Columbia Phonographic Broadcasting System, the network went to air under its new name on September 18, 1927, with a presentation by the Howard L. Barlow Orchestra from flagship station WOR in Newark, and fifteen affiliates.Operational costs were steep, particularly the payments to AT&T for use of its landlines, and by the end of 1927, Columbia Phonograph wanted out. In early 1928 Judson sold the network to brothers Isaac and Leon Levy, owners of the network's Philadelphia affiliate WCAU, and their partner Jerome Louchheim. None of the three were interested in assuming day-to-day management of the network, so they installed wealthy 26-year-old William S. Paley, son of a Philadelphia cigar family and in-law of the Levys, as president. With the record company out of the picture, Paley quickly streamlined the corporate name to "Columbia Broadcasting System". He believed in the power of radio advertising since his family's La Palina cigars had doubled their sales after young William convinced his elders to advertise on radio. By September 1928, Paley bought out the Louchheim share of CBS and became its majority owner with 51% of the business.
Turnaround: Paley's first year
During Louchheim's brief regime, Columbia paid $410,000 to Alfred H. Grebe's Atlantic Broadcasting Corporation for the small Brooklyn station WABC, which would become the network's flagship station. WABC was quickly upgraded, and the signal relocated to 860 kHz. The physical plant was also relocated to Steinway Hall on West 57th Street in Manhattan, where much of CBS's programming would originate. By the turn of 1929, the network had 47 affiliates.Paley moved right away to put his network on a firmer financial footing. In the fall of 1928, he entered into talks with Adolph Zukor of Paramount Pictures, who planned to move into radio in response to RCA's forays into motion pictures with the advent of talkies. The deal came to fruition in September 1929; Paramount acquired 49% of CBS in return for a block of its stock worth $3.8 million at the time. The agreement specified that Paramount would buy that same stock back for a flat $5 million by March 1, 1932, provided that CBS had earned $2 million during 1931 and 1932. For a brief time, there was talk that the network might be renamed "Paramount Radio", but it only lasted a month as the 1929 stock market crash sent all stock value tumbling. It galvanized Paley and his troops, who had no alternative but to "turn the network around and earn the $2,000,000 in two years... This is the atmosphere in which the CBS of today was born." The near-bankrupt film studio sold its CBS shares back to the network in 1932. In the first year of Paley's watch, CBS's gross earnings more than tripled, going from $1.4 million to $4.7 million.
Much of the increase was a result of Paley's effort to improve affiliate relations. There were two types of program at the time: sponsored and sustaining, i.e., unsponsored. Rival network NBC paid affiliates for every sponsored show they carried, and charged them for every sustaining show they ran. It was onerous for small and medium stations, and resulted in both unhappy affiliates and limited carriage of sustaining programs. Paley had a different idea, designed to get CBS programs emanating from as many radio sets as possible: he would give the sustaining programs away for free, provided the station would run every sponsored show, and accept CBS's check for doing so. CBS soon had more affiliates than either NBC Red or NBC Blue.
Paley valued style and taste, and in 1929, once he had his affiliates happy and his company's creditworthiness on the mend, he relocated his company to the sleek, new 485 Madison Avenue, the "heart of the advertising community, right where Paley wanted his company to be", and where it would stay until its move to its own Eero Saarinen-designed headquarters, the CBS Building, in 1965. When his new landlords expressed skepticism about the network and its fly-by-night reputation, Paley overcame their qualms by inking a lease for $1.5 million.
CBS takes on the Red and the Blue (1930s)
Since NBC was the broadcast arm of the Radio Corporation of America, its chief David Sarnoff approached his decisions as both a broadcaster and as a hardware executive; NBC's affiliates all had the latest RCA broadcasting equipment, and were often the best-established stations, or were on "clear channel" frequencies. Yet Sarnoff's affiliates were mistrustful of him. Paley had no such split loyalties: his and his affiliates' success rose and fell with the quality of CBS programming.Paley had an innate sense of entertainment. David Halberstam wrote that he had "a gift of the gods, an ear totally pure", and knew "what was good and would sell, what was bad and would sell, and what was good and would not sell, and he never confused one with another." As the 1930s loomed closer, Paley set about building the CBS talent stable. The network became the home to many popular musical and comedy stars, among them Jack Benny, Al Jolson, George Burns and Gracie Allen, and Kate Smith, whom Paley had personally selected for his family's La Palina Hour as she was not the type of woman to provoke jealousy in American wives. When Paley heard a phonograph record of Bing Crosby, then a young unknown crooner, on a mid-ocean voyage, he rushed to the ship's radio room and cabled New York to sign Crosby immediately to a contract for a daily radio show.
While the CBS primetime lineup featured music, comedy and variety shows, the daytime schedule was a direct conduit into American homes – and into the hearts and minds of American women. For many, it was the bulk of their adult human contact during the course of the day. CBS salesmen recognized early on that this intimate connection could be a bonanza for advertisers of female-interest products. Starting in 1930, astrologer Evangeline Adams would consult the heavens on behalf of listeners who sent in their birthdays, a description of their problems, and a boxtop from sponsor Forhan's toothpaste. The low-key murmuring of smooth-voiced Tony Wons, backed by a tender violin, "made him a soul mate to millions of women" on behalf of the R. J. Reynolds tobacco company, whose cellophane-wrapped Camel cigarettes were "as fresh as the dew that dawn spills on a field of clover". The most popular radio-friend of all was M. Sayle Taylor, the Voice of Experience, though his name was never uttered on air. Women mailed descriptions of the most intimate of relationship problems to the Voice in the tens of thousands per week; sponsors Musterole ointment and Haley's M–O laxative enjoyed sales increases of several hundred percent in just the first month of The Voice of Experiences run.
As the decade progressed, a new genre joined the daytime lineup: serial drama soap operas, so named for the products that sponsored them. These were usually in quarter-hour episodes and proliferated widely in the mid- and late 1930s. They all had the same basic premise, namely that characters "fell into two categories: 1) those in trouble and 2) those who helped people in trouble. The helping-hand figures were usually older." At CBS, Just Plain Bill brought human insight and Anacin pain reliever into households; Your Family and Mine came courtesy of Sealtest Dairy products; Bachelor's Children first hawked Old Dutch Cleanser, then Wonder Bread; Aunt Jenny's Real Life Stories was sponsored by Spry Vegetable Shortening. Our Gal Sunday, The Romance of Helen Trent, Big Sister, and many others filled the daytime ether.
Thanks to its daytime and primetime schedules, CBS prospered in the 1930s. In 1935, gross sales were $19.3 million, yielding a profit of $2.27 million. By 1937, the network took in $28.7 million and had 114 affiliates, almost all of which cleared 100% of network-fed programming, thus keeping ratings, and revenue, high. In 1938, CBS acquired the American Record Corporation, parent of its one-time investor Columbia Records. In 1938, NBC and CBS each opened broadcast studios on Sunset Boulevard in Hollywood in order to attract the entertainment industry's top talent to their networks.
CBS launches an independent news division
The extraordinary potential of radio news showed itself in 1930, when CBS suddenly found itself with a live telephone connection to a prisoner called "the Deacon", who described, from the inside and in real time, a riot and conflagration at the Ohio Penitentiary; for CBS, it was "a shocking journalistic coup". Yet as late as 1934, there was still no regularly scheduled newscast on network radio; "most sponsors did not want network news programming; those that did were inclined to expect veto rights over it." There had been a longstanding wariness between radio and the newspapers as well; the papers had rightly concluded that the upstart radio business would compete with them in both advertising dollars and news coverage. By 1933, the newspapers began fighting back, many no longer publishing radio schedules for readers' convenience, or allowing their own news to be read on the air for radio's profit. Radio, in turn, pushed back when urban department stores, newspapers' largest advertisers and themselves owners of many radio stations, threatened to withhold their ads from print. A short-lived truce in 1933 even saw the papers proposing that radio be forbidden from running news before 9:30 a.m., and then only after 9:00 p.m., and that no news story could air until it was 12 hours old.File:CBSNewsRemote1937.jpg|left|thumb|CBS News engineers prepare a remote: Justice Hugo Black's 1937 denial of Ku Klux Klan ties.
It was in this climate that Paley set out to "enhance the prestige of CBS, to make it seem in the public mind the more advanced, dignified and socially aware network". He did it by sustaining programming of the New York Philharmonic, Norman Corwin's drama, and an in-house news division to gather and present news, free of fickle suppliers such as the newspapers or wire services. In the fall of 1934, CBS launched an independent news division, shaped in its first years by Paley's vice-president, former New York Times columnist Ed Klauber, and news director Paul White. Since there was no blueprint or precedent for real-time news coverage, early efforts of the new division used the shortwave link-up CBS had been using for five years to bring live feeds of European events to its American air.
A key early hire was Edward R. Murrow in 1935; his first corporate title was Director of Talks. He was mentored in microphone technique by Robert Trout, the lone full-time member of the News Division, and quickly found himself in a growing rivalry with his boss White. Murrow was glad to "leave the hothouse atmosphere of the New York office behind" when he was dispatched to London as CBS's European Director in 1937, when the growing Hitler menace underscored the need for a robust European Bureau. Halberstam described Murrow in London as "the right man in the right place in the right era". Murrow began assembling the staff of broadcast journalists who would become known as the "Murrow Boys", including such men as William L. Shirer, Charles Collingwood, Bill Downs, and Eric Sevareid. They were "in own image, sartorially impeccable, literate, often liberal, and prima donnas all". They covered history in the making, and sometimes made it themselves. On March 12, 1938, Hitler boldly annexed nearby Austria, and Murrow and the Boys quickly assembled coverage with Shirer in London, Edgar Ansel Mowrer in Paris, Pierre Huss in Berlin, Frank Gervasi in Rome, and Trout in New York. This bore the now-ubiquitous News Round-Up format.
Murrow's nightly reports from the rooftops during the dark days of the London Blitz galvanized American listeners. Even before Pearl Harbor, the conflict became "the story of the survival of Western civilization, the most heroic of all possible wars and stories. He was indeed reporting on the survival of the English-speaking peoples." With his "manly, tormented voice", Murrow contained and mastered the panic and danger he felt, thereby communicating it all the more effectively to his audience. Using his trademark self-reference "this reporter", he did not so much report news as interpret it, combining simplicity of expression with subtlety of nuance. Murrow himself said he tried to "describe things in terms that make sense to the truck driver without insulting the intelligence of the professor". When he returned home for a visit late in 1941, Paley threw an "extraordinarily elaborate reception" for Murrow at the Waldorf-Astoria. This reception also served as an announcement to the world that Paley's network was finally more than just a pipeline carrying other people's programming and had now become a cultural force in its own right.
When the war was over and Murrow returned for good, it was as "a superstar with prestige and freedom and respect within his profession and within his company". He possessed enormous capital within that company, and as the unknown form of television news loomed large, he would spend it freely, first in radio news, then in television, first taking on Senator Joseph McCarthy, then eventually – and unsuccessfully – William S. Paley himself.