It Owned the Signal, Not Just the Set
It built the televisions in America's living rooms and owned the patents its rivals paid to use. In 1986 it was sold for $6.28 billion, and today the name is one other companies rent.
It Was Furniture Before It Was a Television
The set sat low against the wall on four short legs, a long cabinet of dark wood with a cloth grille over the speaker. It was furniture first.
A lamp stood on one end of it and a framed photograph on the other.
You turned the knob and nothing happened for a moment. Then came a hum, a point of light, and a picture that opened out of the middle of the screen like something waking up.
The dial clicked from channel to channel with a sound the whole room knew.
On Sunday nights the family arranged itself in front of it, the good chair closest, the floor left for the children.
When the screen was off it held the gray reflection of the room. Nobody thought of it as a machine.
Take a look at this…
It's a radical "light-speed" device that's turning AI as we know it into "Accelerated AI", making it 100 times faster and 100 times more energy efficient.
In fact, Jensen Huang, Nvidia's founder and CEO, says this device is shattering the limitations of AI and without it, AI can't scale.
If you want to discover what this technology is, why Nvidia is betting billions on it…
And the one stock we believe could be the biggest winner when "Accelerated AI" goes mainstream…
The Set Was the Least of It
The cabinet was an RCA, and the company behind it had never really been in the television business, the way it looked from the couch.
RCA was assembled in New York City in 1919, put together by General Electric and a few others not to sell anything at first but to own something: the patents behind radio. It was a patent trust before it was a store. Every company that built a radio had to come to it and pay.
Then it went a step further. A radio with nothing to receive is a piece of furniture, so in 1926 the company built a network, NBC, to fill the air with something worth tuning in for.
The programming was free to the listener. Its purpose was to sell the box that caught it.
The device brought the money in once. The signal brought it back for years.
Every Rival Was Also a Customer
The real advantage was that RCA sat underneath the whole industry. When color television arrived, the system the entire country adopted in 1953 was RCA's own. Every color set sold in America, whatever name was on it, worked the way RCA had decided.
RCA also made the picture tubes, the costly heart of the set, and sold them to competitors. It earned a profit of about $35 on each tube it shipped to a rival. The other companies fought RCA on the showroom floor and paid RCA in the stockroom.
Early on it held as much as 70 percent of the color market, and by the 1960s it was the largest maker of consumer electronics in the world. Under David Sarnoff, its president for more than thirty years, the company set the standard and then sold the parts to rivals racing to meet it.
The Standard Became Everyone's
Then the thing RCA owned stopped being scarce.
The patents expired on their own schedule, and a standard anyone could build to for free was no longer an advantage to the company that wrote it. Meanwhile manufacturers in Japan learned to make the same set for less, and then to make it better.
In 1964 American factories built ninety four of every hundred color televisions sold in the country. By 1987 that share had fallen to seventeen.
RCA's role in the system had been to own the design and supply the parts. When the design was common property and the parts came cheaper from overseas, that role quietly emptied out.
The company was still making televisions. It was no longer the reason anyone else could.
The Buyer Kept the Network and Sold the Sets
The end came as a purchase, not a bankruptcy.
In 1986 General Electric bought the whole of RCA for $6.28 billion, the largest merger outside the oil business that had been done to that point.
General Electric wanted the network and the defense work. It did not want to make televisions.
In 1987 it traded the consumer electronics division, the RCA name along with it, to Thomson of France in exchange for a medical imaging business and cash.
The company that had owned the living room was sorted into the parts worth keeping and the parts worth selling. The sets were the parts worth selling.
The Name Outlived the Machine
What RCA proved is the quiet engine under a great deal of modern business. Sell the device close to cost, and own the thing that makes the device worth having.
The console is the razor. The programming is the blade.
Game makers sell the machine cheap and keep the games. Phone makers sell the handset and keep the store inside it.
The trick RCA ran with a radio and a network in 1926 is running right now on the screen in front of you.
The name still appears on televisions, built by strangers under license.
Every set it built went dark.
The network it built to sell them is still on the air.
