Regulation and Government Intervention in the Radio Industry

Through government intervention and the privatization of the radio industry, regulation helped push the radio industry in a profit-driven direction, exemplified by AT&T's use of advertising to make money. 

During World War I, the Navy took over control of all radio stations, but when the war ended, the U.S. Government wanted the radio industry to be privately owned. However, the government didn't want American Marconi to hold a monopoly, so they forced the company to split in order to establish competition. General Electric, AT&T, and Westinghouse purchased American Marconi to create three separate radio companies. AT&T was the first to focus on using advertising to finance and make money through radio programming.

Because of the competition involved in the formation of multiple radio companies, AT&T needed a unique way to make money, and they discovered that companies would pay money to advertise their products. Other companies began to use this strategy to turn a profit, and radio steadily became more and more advertising-based. Companies started putting together "soap operas" in order to attract viewers while at the same time sell their products; the first companies to do this were selling soap, hence the name. Radio evolved to the point where the majority of profit came from advertising, all due to the government intervention and forced break-up of American Marconi.