“We have added a radio receiving set to our central office equipment and furnish radio service to our subscribers. This service is furnished over cable pairs that would otherwise be idle...To furnish this service we use a standard radio receiving set and three stages of amplification. A circuit is furnished to the subscriber at a monthly rental for the circuit only, and the subscriber buys his own loud-speaker or receivers."Another very early cable radio experiment was in Dundee, Michigan. It was first offered as a luxury service at a whopping $1.50 per month. It was run by the Farmer's Telephone Company, who still exists. A similar system was built in Lorain, Ohio, but it only served about 700 homes. Cable radio took off overseas before it came to America. Unlike a true radio, a cable radio doesn't need much in the way of components or even an antenna. Using amplifiers, and relays across twisted pair a "radio" would only need an on/off switch and a volume dial. since there was only one station there was no need even for a tuner. It was just a speaker with a variable resistor. So in a small urban foot print it can be cost effective for consumers. In south Korea they were building out large municipal systems as early as the 1940s. Similar systems popped up in Europe and the pacific.
In the U.S. the expansion was mostly with rural systems that operated like amplified speaker wire. Homes didn't need to have power in order to have radio. In the large rural southern regions that still hadn't been electrified that had commercial appeal. One of the earliest urban systems in the U.S. was built by Muzak. Muzak built it's own system in the 1940s in New York but took one in the chops when they carried a WOR-AM broadcast of the world series in 1941. The subsequent lawsuit was actually the start of retransmission fees. Patrick R. Parsons book Blue Skies: A History of Cable Television covers this ear in great detail. More here too.
In the U.S. the first cable radio stations started cropping up in the 1970s. Cable TV was increasingly popular and the notion of piping in some audio channels seemed like a natural progression. The first commercial cable radio station in the United States was probably CABL-FM 108. It was carried on the Theta Cablevision system, serving homes in the West Los Angeles area. They first went live on January 1st 1972. The station was run by Brad Sobel, a former pirate radio man. According to him in a Billboard article potential audience was between 4,700 and approximately 25,000 (based on information provided by Brad Sobel in an article in Billboard. He was also still involved with KIIS-AM at the same time. He was later an engineer at KIQQ-AM, KWTH-FM, KZPN-FM, KCRY-FM and a slew of others. Brad was an all around radio man.