Advertising, in time, proved almost a license to print money, and the effects on broadcasting of the revenue model it introduced can scarcely be overstated. It gave AT&T, and later the rest of the industry, an irresistible incentive not just to broadcast more but to control and centralize the medium. To see why, compare the older model: When revenues came from the sale of radio sets, it was desirable to have as many people broadcasting as possible--nonprofits, churches, and other noncommercial entities. The more broadcasters, the more inducement for the consumer to buy a radio, and the more income for the industry. But once advertisements were introduced, radio became a zero-sum game for the attention of its listeners. Each station wanted the largest possible audience listening to its programming and its advertisements. In this way advertising made rivals of onetime friends, commercial and nonprofit radio.This is Tim Wu in The Master Switch*, describing the beginnings of commercial radio broadcasting. When AT&T (who was competing with RCA to dominate radio broadcasting) started using its 'long lines' to carry programs to transmitters across the country, they discovered that advertising to a mass audience was far more profitable--and could support professionally produced, higher quality content--than any other business model available to them. This, in turn, lead the industry to successfully lobby the government to allow only a few, high-power 'clear channel' broadcasters (instead of allowing many lower-power ones.)
It's interesting to see how advertising, because it pays for attention, a resource too easily divisible, caused media to agglomerate. The media industry, in protecting itself from competition, has to limit the number and variety of voices that are heard. Mass media is, by its nature, homogeneous media.
1. Mass media, as it is today, is not the only way things can, or should, be. There was a vibrant radio culture before it became a mass medium, with a more democratic voice.
2. Our adtech allows advertisers to reach small audiences. The advertiser no longer needs mass media. Mass media will, however, fight to maintain their current market position. In almost all of the other media this book chronicles, the government was eventually enlisted to regulate out weaker players. The fight over net neutrality was one of these efforts, but certainly not the last.
* Required reading. This is the first book in twenty years that, as soon as I finished it, I started reading again. A history of the rise, consolidation and disruption of the telephone, radio, motion picture, and television industries, it elucidates the history that can inform scenarios of the possible future of our industry better than any other analysis. It's a good read, too, with wonderful descriptions of the people behind the inventions and companies and how the culture of their times influenced them.