Monday, December 12, 2011

The Biltmore Agreement

 In the early 1930s there was a decline in newspaper revenues. somehow ignoring the Great Depression, newspapers blamed radio. In truth, advertisers were increasingly putting their advertising money into broadcasting. In the same way that Craigslist won the classifieds section from the news paper, radio took news. Radio by virtue of being live, could break a story faster than any print medium.  This new dynamic deeply concerned the Associated Press and the United Press because print media were their biggest customers and radio was their newest. Newspapers were pressuring them not to do business with radio stations in effect asking them to choose between them. In 1933 that actually happened, albeit briefly. Hostilities continued to rise. When CBS asked to be allowed to put a reporter in the congressional press gallery the old newsmen balked. (Radio was kept out until 1939) You can imagine at this climactic precipice, the parties vested on the radio side of things were ready to cut a deal.

On December 11th and 12th of the year 1933, William S. Paley of CBS and David Sarnoff of RCA met at the Biltmore Hotel in New York City with representatives from all the three wire services, ANPA (American Newspaper Publishers Association) and NAB (the National Association of Broacasters). But they could exactly write out a contract, that could be considered restraint of trade. It proceeded as a gentleman's agreement, collusion in other words. The terms were summarized very well in the book Media At War: Radio's Challenge To The Newspapers by Gwenyth L. Jackaway, with I further summarize for brevity below:

  1. Networks were to cease gathering their own news.
  2. The wire services would provide service to the PRB (Press Radio Bureau) to edit into announcements for use on radio.
  3. Radio stations would pay for use of the PRB
  4. Bulletins could be no longer than 5 minutes in length
  5. Morning bulletins could not be aired before 9:30 AM
  6. Evening bulletins could only be aired after 9:00 PM
  7. New bulletins could not have local sponsorship
  8. Urgent bulletins were permitted to violate the above
  9. Radio commentators were not permitted to cover news less than 12 hours old

That lasted about as long as you'd expect. Local radio stations outside of NAB largely ignored the agreement, and larger network broadcasters felt pressure to compete and bent the rules. Newspapers returned the favor, by refusing to carry news about radio, unless it was slandering radio. That came to an end, only as newspapers discovered it was just easier to buy the radio stations...