RCA Corporation

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RCA Corporation

General Electric Company
3135 Easton Turnpike
Fairfield, Connecticut 06431
U.S.A.
(203) 373–2211

Incorporated: 1919 as the Radio Corporation of America Absorbed by the General Electric Company

At the end of World War I, the Marconi Wireless Telegraph Company of America was the only company in the United States that was equipped to operate transatlantic radio and telegraph communications. The United States government found this unacceptable since the Marconi Wireless Company of America was entirely owned by a foreign company—the British Marconi Company. At the prompting of Franklin D. Roosevelt, who was undersecretary of the navy at the time, General Electric (GE) formed a privately owned corporation to acquire the assets of American Marconi from British Marconi. On October 17, 1919, the Radio Corporation of America (RCA) was incorporated and within a month had acquired those assets.

General Electric was the major shareholder of RCA and the two companies cross licensed their patents on long distance transmission equipment. A year later American Telephone & Telegraph (AT&T) bought into RCA and also cross licensed patents with the new company. Transoceanic radio service began that same year with a major station in New Jersey broadcasting to England, France, Germany, Norway, Japan, and Hawaii. The world’s first licensed radio station also began transmitting in 1920. This station, KDKA of Pittsburgh, was owned by the Westinghouse Company.

In 1921, Westinghouse, too, joined the ranks of asset holders of RCA; in exchange for selling Westinghouse radio equipment to the public, RCA was permitted access to Westinghouse patents. RCA entered the broadcasting field in 1921 with its transmission of the Dempsey-Carpentier fight in Jersey City, New Jersey. Using a transmitter borrowed from the navy. The company began full-time radio broadcasting shortly afterwards when it became an equal partner with Westinghouse in station WJZ of Newark, New Jersey.

RCA continued to expand its transoceanic communications operations and opened two more broadcasting stations, in New York and Washington, D.C. In 1924 RCA transmitted the first radio-photo, a portrait of Secretary of State Charles Hughes. This transmission was made from New York to London and back to New York, where it was recorded and marked a pioneering development in the history of television. Two years later, in 1926, RCA formed the National Broadcasting Company (NBC). NBC controlled the radio stations owned by RCA, produced radio programs, and marketed these programs to other radio stations, activities which constituted the first radio network. David Sarnoff, the leading figure at RCA during these formative years, had envisioned the radio network as a form of public service, free from advertising, but this proved financially impossible and sponsors were solicited. At this time RCA began selling components manufactured by the Victor Talking Machine Company of Camden, New Jersey.

Product innovation abounded in this era. In 1927 RCA introduced the first Radiotron tube. This radio tube was the first to operate on alternating current, thereby eliminating the need for batteries—a crucial step in the development of mass-produced electric radios. A year later General Electric perfected a system of recording sound on film, which it called the RCA Photophone. This system was superior to a competing system called Vitaphone developed by Western Electric and Warner Brothers, but movie theaters were already adopting the Vitaphone system by the time the RCA product was ready for marketing. The two systems were incompatitble, so RCA’s only hope of entering the market was to equip a competing theater chain with the Photophone system. With the aid of Joseph P. Kennedy, RCA Photophone, Inc. was merged into two Kennedy-controlled companies—the Film Booking Office of America (FBO), a movie production company, and the Keith-Albee-Orpheum theater chain. RCA owned a substantial interest in this creation, the Radio-Keith-Orpheum (RKO), which provided an initial market for the RCA Photophone.

In the following year RCA purchased the Victor Talking Machine Company. Sarnoff had always wanted to market a radio and phonograph housed in the same box, but the phonograph companies were suspicious of radio, fearing the loss of their market. So Sarnoff decided to purchase a phonograph company. Several years of negotiation preceded RCA’s 1929 purchase of Victor. RCA owned 50% of Victor, General Electric owned 30%, and Westinghouse owned the remainder. RCA formed the RCA-Victor Company (and the RCA Radiotron Company) only after it had acquired tube-manufacturing assets from General Electric and Westinghouse. The trademark of the Victor company, a dog staring at an old phonograph above the caption “His Master’s Voice,” was also purchased by RCA and became one of the most famous trademarks in marketing history.

David Sarnoff became president of RCA in 1930, the year legal problems concerning the company’s monopoly status began. The Justice Department filed an antitrust suit against RCA seeking to strip RCA of all the patents it had gained. The battle ended two years later; RCA retained all of its patents but General Electric, AT&T, and Westinghouse were forced to sell their interests in the company. The General Electric association was remembered in NBC’s trademark three-note chime—G,E,C—which stands for General Electric company.

By this time RCA’s various businesses included broadcasting, communications, marine radio, manufacturing and merchandising, and a radio school. The year after it became an independent company, RCA moved into its new headquarters—the RCA Building in Rockefeller Center in New York City.

Though the company managed to move during the height of the Depression, this period was as difficult for RCA as it was for any other company. However, while most companies were reducing expenditure across the board, Sarnoff, though he reduced expenditures elsewhere, greatly expanded RCA’s high-technology research department during the Depression. Sarnoff believed that for RCA to retain its position in the electronics field, continued technological research was essential.

One of the technological advances RCA investigated during the Depression was television. RCA made the first public television broadcast at the New York World’s Fair in 1939, when David Sarnoff dedicated the RCA pavilion before TV cameras, and the world’s first public television service was unveiled at the fair. This experimental system only covered the metropolitan area of New York City; the RCA Victor television console manufactured at this time stood over four feet high yet had only a four-inch screen.

The Federal Communications Commission (FCC) approved RCA’s television system in the spring of 1941, but World War II halted further development of commercial television. RCA was also affected by a 1941 Federal Communications Commission investigation that decided that NBC, which operated two networks (the red and the blue) was a monopoly. The FCC declared that no company could own more than one network, and RCA was ordered to sell one. Two years later the less-profitable blue network was sold to Edward Noble and became the American Broadcasting Company (ABC).

RCA profited immensely from the World War II, when it began its long association with the Defense Department. Due to the scarcity of raw materials for television development, RCA switched production to military electronic equipment such as tubes for radio, radar, and microwave communications.

After the war, RCA resumed the production of radios and commercial tubes and turned to its television research once again. The NBC radio network expanded into television, and in 1946 the first television network linked NBC facilities in New York City, Washington, Philadelphia, and Schenectady, New York. Television became commercially available that same year when RCA introduced the world’s first mass-produced television set, which sold for $375.

The entire electronics industry underwent a fundamental change with the birth of the transistor in 1948. RCA quickly entered the semiconductor field and developed new types of transistors. The company eventually applied this new technology to military and commercial electronic products, data-processing systems, and aerospace production.

The progression from black-and-white to color television occurred swiftly, but color programming did not become available to the public until 1954. RCA developed a color system which was compatible with the existing black-and-white TVs (a color set could receive black-and-white broadcasts and a black-and-white set could receive color broadcasts). The company’s main competitor, Columbia Broadcasting System (CBS), also developed a color system. Although the CBS system produced a higher-quality picture, it was not compatible with existing sets. The Federal Communications Commission approved only the CBS system since the relatively small number of television sets in American homes made incompatibility a fairly insignificant consideration. RCA appealed the decision and worked on the quality of its system. In 1953 the FCC reversed its decision, since RCA had greatly improved its picture quality and the number of sets in American homes had increased significantly, making compatibility a more important consideration.

During the late 1950s RCA ventured into satellite equipment. In December, 1957 the first successful satellite radio-relay equipment was launched into space aboard an Atlas missile. RCA produced the radio equipment used in this experimental attempt at global communications. In the following years RCA developed a number of satellites for the National Aeronautics and Space Agency (NASA). One such project, completed in 1962, involved six weather satellites and a ground-based complex for televised observation. The following year the Relay communications satellite was put into orbit. This satellite transmitted TV pictures between the United States and Europe and linked Latin America to the United States by radio.

RCA also planned and coordinated the construction of the Ballistic Missile Early Warning System, a project that involved almost 3,000 subcontracted companies. This radar defense system stretches across the Canadian Arctic and is intended to warn the United States of impending missile attack from the Soviet Union.

During the 1960s, color television became a staple of life in the United States; by 1966 sales of color television sets industrywide rose to $3 billion a year. During this decade RCA continued production of home television sets, and came to dominate camera industry with its best-selling TK-44 camera.

RCA was also involved in the major space projects of the 1960s. The first live pictures to be transmitted from outer space to earth were recorded by a miniature RCA camera carried aboard the Apollo 7 flight, and the first words to be broadcast to the earth from the moon were transmitted by an RCA-manufactured radio backpack carried by Neil Armstrong.

At the end of the decade the Radio Corporation of America officially changed its name to the RCA Corporation. A change in trademark went along with this change in name—the circular logo with lighting bolt was replaced by a simpler three-letter block design.

In 1971 David Sarnoff died. He had been president of RCA since 1930 and chairman since 1947; though he resigned as CEO in 1966, he remained chairman until his death. His reign proved a difficult one to follow.

Sarnoffs son Robert succeeded him as head of the company, remaining until 1975, when the board asked for his resignation. Robert Sarnoff was succeeded by Anthony L. Conrad, who was forced to resign almost immediately when the board learned that he had not filed personal income tax reports. In 1976 Edgar H. Griffiths took over. Described as a “numbers man” who was primarily concerned with quarterly profits, Griffiths began divesting RCA of some of its diverse subsidiaries, which by then included Banquet frozen foods, Hertz rental cars, and the publisher Random House. During the following ten-year period, RCA divested itself of roughly one subsidiary a year. However, under Griffith’s direction RCA also purchased CIT Financial, a financial services conglomerate which caused the company to lose its A credit rating. Shortly afterward, in 1981, the board ousted Griffiths and asked RCA board-member Thornton F. Bradshaw, president of the Atlantic Richfield Company, to take over.

Bradshaw made Robert R. Frederick, formerly of General Electric, president of RCA. Both men favored decentralized management and the delegation of authority. By 1985, all of RCA’s diversified subsidiaries had been sold, except for Coronet Industries, the carpet manufacturer.

In June of 1986, the giant General Electric Company acquired RCA for $6.4 billion in cash, and the company ceased to exist. The Justice Department, which had forced GE to divest its interest in RCA more than 50 years before, approved the merger with the requirements that GE sell RCA’s vidicon tube business and five radio stations controlled by NBC. Since RCA’s record company, carpet business, and insurance firm did not fit into GE’s long-term business strategy, they were all sold in 1986, for more than $1.3 billion. GE kept the RCA brand name, and made NBC a relatively autonomous division of GE; the rest of RCA’s businesses were combined with GE’s operations.