Public Service and not-so-Public Profit

In the 1930's and 40's both NBC and CBS had to learn to balance their programming between sponsored programs such as the RKO Theater and the Camel Pleasure hour with the regulations placed upon them by the Communications Act of 1934.  The profit systems of advertising among NBC and CBS involved sponsorships as opposed to outright advertising.  In the late 20's NBC created shows with the goal of having them be sustainable; in order to do that they needed sponsors.  Sponsors would pay to have their named announced and therefore their product advertised; in the 30's sponsors realized a better way to make a profit.

Sponsors realized they could make more money by creating programs which successfully produced their product and avoided the requirements placed upon them by the T.V. stations (aka the government) to balance profit and public service.  almost all daytime and evening programs were produced by sponsors.  Networks sold hour long blocks to many companies in order to make a profit and keep the show sustained through the money from the sponsors.  After the the industry responded to pressures from reform the focus began to change from profit to a hybrid between profit and public service.

These programs were designed to meet the needs of the public shows such as America's Town Meeting of the Air and The University of Chicago Round Table included programming from public affairs discussions to musical performances.  Programs such as these and the daily news would more often than not be unsponsored and sustained by the network.  NBC and CBS created slots (in the public service side for free) and gave them to organizations or [sold them to] sponsors which they were comfortable working with (big business, government agencies, etc.).

A network was required to balance public and profit programming because of the reform during the 1930's.  Both NBC and CBS balanced their sponsored programs and public service programs.  Even though they were regulated they were able to favor organizations which they were comfortable with and with who they could earn a high profit (in a sponsor case) or meet the needs of the most viewers (in a public service case).  This strategy allowed both NBC and CBS to meet the government mandates for public service and their own commercial mandates for profit while creating programs which were sustainable for their networks.