Murrow, Paley and the Shifting Dynamics of Television in the 1950s

We all know how the Murrow/McCarthy story ends. Murrow’s contribution to the defeat of McCarthy was that he had the courage to use television against McCarthy. March 9, 1954 did not mark the end of "Tail Gunner Joe," but it was the beginning of the end. What was interesting was the relationship between Paley and Murrow, and the shifting dynamics of television, which was played out to perfection in the brilliant scene at the end of the movie when Murrow, Friendly and Paley meet in Paley’s office. It inspired me to read historical bios of the men and the industry. Here’s what I learned. The ’54-55 See It Now season had been a success, the show winning major broadcast awards. But the dynamics of the industry were shifting: awards brought esteem but ratings brought profit. See It Now never won huge audiences. Interestingly, around ’55, the show’s sponsor, ALCOA, introduced a new product, aluminum foil, and decided it needed to market the product to housewives. The cost of air time kept rising while the See It Now ratings softened. Surveys revealed that of those who watched See It Now 53% were college educated vs. 28% of all viewers, and 57% were professionals or white-collar workers vs. 31% for all viewers. Nearly 95% of the network affiliates carried Murrow’s nightly news and almost all carried Person to Person, but almost 33% of the affiliates turned down See It Now.

Two major events occurred. First, in May ’55, the See It Now broadcast featured a favorite theme, “the little guy standing up to evil.” A small Texas weekly newspaper had exposed a land scandal that reached the highest levels of the Texas government. The publisher was getting pressured by some of the politicians that were featured in the story. However, ALCOA, was embarking on a major expansion at the time in Texas and needed the cooperation of state officials. Instead it was receiving complaints and no cooperation for sponsoring the See It Now show. ALCOA’s President, Chief Wilson, met with Paley and said he wanted to sell aluminum to homemakers, not sponsor news or investigative programming. He wanted serenity and a mass audience. ALCOA dropped See It Now.

The second event was The $64,000 Question. The ratings for this show went through the roof. The runaway success of the show shifted the economics for Tuesday night on CBS. The success of the quiz show had increased the value of the genre. If Paley wanted to hold the audience for the next hour, he needed something more to its taste than See It Now. Even with its sponsor, ALCOA, See It Now had only brought in about $50,000 per program and it had cost more than that in production costs. In contrast, Revlon sponsored The $64,000 Question to the tune of $80,000 per week. By the sixth week on the air, the show had the highest ratings in television. And as the ratings soared, so would the sponsor’s payment to CBS (since advertising fees were keyed to the ratings).

By ’55, CBS’ overall ratings were the highest in the industry. CBS earned $16 million (after taxes). One would think that Paley could have easily afforded to sustain an award-winning news show. But the decision was no longer Paley’s alone. He had not “owned” the network; it was owned by stockholders. And when a network produced a hit, like The $64,000 Question, the network’s stock went up (because its revenues and profits went up).

But Paley had plans for See It Now. He envisioned a full hour show for Murrow to devote more time to topics. He would appear eight to ten times per season, and he had a sponsor, General Motors, for the 1955-56 season. Its first show was “The Vice Presidency: The Great American Lottery.” But just before the show was ready to air, Eisenhower suffered a heart attack. General Motors viewed the show as an attack on Nixon’s fitness to be president and cancelled its sponsorship. (Boy was Murrow prophetic.) CBS salesmen now had to peddle the show to many sponsors.

To CBS, Murrow was a highly honored newsman, controversial and sometimes profitable (Person to Person). By ’57, he was earning $300,000 per year, the highest paid figure in broadcast journalism by far. When asked at a stockholders’ meeting why Murrow was earning more than the chairman, Paley replied, “He’s more valuable.”