Well. Here we are.
Part three of the video
series on the CED.
The continuation of a story of “why?” and “how?”
that will make
you think,
“Why?” and
“How?”
Now, a quick recap of what we’ve learned so far.
*inhales deeply*
In the mid 1960’s, RCA had come up with
an idea for a video player using discs not
too unlike those of conventional record players.
It took a frustratingly long time to come
to fruition, and by the time it was released
in 1981, it was competing with not only the
videocassette recorders coming in from Japan,
but also with the laser optical disc system
backed by Philips-MCA. Featuring a perfect
mix of the worst parts of tape and the worst
parts of laserdiscs, the format swiftly failed
and by 1984, RCA gave up.
And then basically died altogether.
Since it’s already been covered in the last two
videos, I’m not going to get into how this works.
Go watch those if you’re interested.
This video is here to answer the question;
“Why on Earth was this project so gosh
darn slow?”
and the answer to that question is remarkably complex.
We need to go back
to the history of RCA so that we can get a
little more context. And, just to warn you,
a retelling of this story pretty much has
to be nonlinear in time, so strap in.
AND PAY ATTENTION!
David Sarnoff was a legendary figure in the
world of RCA, and indeed in consumer electronics
as a whole. His work at RCA predated RCA itself.
He was only 9 years old when his family arrived in the US from Russia in 1900,
and just seven years later he had joined the ranks of American Marconi.
Even during his very early years
it was obvious that he had a knack for innovation.
He was constantly sending memos within the
company suggesting improvements to their equipment
and methods. And, he’s even said to essentially
be the father of commercial radio,
using the term “radio music box” to describe a potential
household application
for the infant communications technology.
When American Marconi became RCA in 1919, Sarnoff
was Commercial Manager.
And by 1930, he had become General Manager.
While both the President
and Chairman were positions above his role,
their holders, Edmund Nally and Owen Young
respectively, were largely preoccupied with
external affairs. Thus, Sarnoff effectively
had complete control over the company by this time.
Sarnoff had learned that in the business of
radio,
one could not simply exist by doing the same things again and again.
Innovation was absolutely key.
In a 1928 speech to the 
Harvard Business School, he said,
He believed that to achieve success, the company should have a culture of inventiveness.
Not only would this ensure a leading position in the market,
but future development could and would
prove to be beneficial to the company,
often in unseen ways.
And in fact, it wasn't the consumer electronics
industry that really defined RCA initially.
In its early years, RCA’s key assets were
its patents. The birth of RCA happened to
seize control of American Marconi’s position,
as remember they were British and we can’t
have them controlling things. Initially its
mission was to simply to gain control of the
wireless communications industry, establish
and grow a pool of patents, and serve as a
merchandising arm for its parent companies
who might want to sell radio equipment on
the open market.
At this time, RCA was owned
by General Electric, Westinghouse, AT&T, and,
weirdly,
United Fruit.
Various American Marconi
stockholders retained some ownership interest, as well.
Anyway, through the transition from American
Marconi to RCA, David Sarnoff continued
fighting for his radio music box idea.
And nobody
was having it.
He didn’t yet have much power in the company to influence that sort of thing,
but he didn’t care. He just kept at it,
telling everyone he could “we need
to make radios, you guys”.
And finally, after a couple of radio stations had been
licensed to start broadcasting,
his superiors gave in.
In 1920, $2,000 was allocated for the development
of a new radio receiver and various accessories.
Also, somehow, Sarnoff got his superiors onboard
with starting their own experimental broadcasts,
and the radio station WJZ was formed as a
joint venture between RCA and Westinghouse.
You have no idea how right Sarnoff was about
this whole household radio business.
OK, you probably do.
But he was very right.
Almost immediately demand for radio receivers exploded.
Sales figures went from essentially nothing in
1920, to $60 million dollars in 1922,
$130 million by 1923,
and $358 million in 1924.
I do believe it’s safe to say that radio was the iPhone of the 1920’s.
[ audience booing ]
And RCA was not exactly in a place to meet
this demand. Nobody had yet figured this business,
which wasn’t created to sell radios,
would need to sell radios.
But they needed to sell radios.
And they needed to figure this out
fast.
Surprisingly, they managed to do it.
In just the span of one year, 1921-1922, their
sales team went from 14 people.
That's 14 *people*.
To 200 offices across the country, each with their own sets of people.
By 1922, the business of entertainment radio
was RCA’s largest.
So much for doubting Sarnoff, eh?
In fact, it was thanks to this
explosive growth that Sarnoff was promoted
to Vice President and General Manager.
And Sarnoff learned something interesting through all this.
Even though they were selling plenty
of radios, they didn’t actually need to
manufacture anything at all to make money,
so long as they held some nice and juicy patents.
RCA owned thousands of radio patents, and for years
if any company, anybody at all wanted to build
a radio to sell to the public, they’d have
to pay royalties to RCA.
Now, this wasn’t exactly working in the
Wild West days of radio. The courts hadn’t
yet enforced RCA’s patents, and so RCA couldn’t
reasonably pursue any patent litigation.
They could only threaten.
And the early days of
radio were very tumultuous.
The rapid pace of innovation meant that most newcomers ultimately failed.
600 of roughly 900 companies building radio
receivers during this early boom had shut down
by 1927.
But, eventually RCA’s patents were deemed valid,
and milk them they did.
RCA essentially owned the radio business starting
in the mid twenties. They created a system
known as “package licensing”, which effectively
forced anyone in the radio business to pay
some pretty hefty loyalties to them. In fact,
these new licensees had to pay past damages
to RCA. Suddenly, RCA had nearly complete
control of the radio industry.
Now, this may have been all cool and groovy to RCA,
and in fact David Sarnoff tried to defend these licensing tactics as RCA’s birthright,
but this very anti-competitive behavior eventually
landed them in trouble with, well, everybody.
In the meantime, though, oh WOW were things going well for RCA!
Their patents and royalties raked in millions
of dollars, and it meant that the radio industry
could grow tremendously on the backs of hundreds
of other companies, all the while RCA getting
a nice and healthy cut. The success of these
tactics cemented in Sarnoff’s mind the importance
of research to the company’s long-term success.
So long as they could keep inventing things,
and get their patent on it, they’d be golden
forever.
And it wasn’t just that they were getting
rich that made Sarnoff so eager to pursue research.
It was also the knowledge that once
everybody had bought a radio, there wouldn’t
be much potential for growth anymore. By 1929,
RCA alone was selling 75,000 radio sets per week,
pulling in $30 million in profit annually.
With so many radios already sold, it was inevitable
that these sales numbers wouldn’t last.
Even more of a reason to keep cranking out those patents!
This realization also ushered in an era of
diversification for RCA. After working out
a deal to buy AT&T’s various radio stations,
RCA had formed the National Broadcasting Company.
That’s right, NBC.
Of course, RCA purchased
Victor Talking Machine in 1929, and it was
around this time that Sarnoff sought to free
RCA from its owners.
Buying Victor was part of that strategy,
as it would suddenly give
them loads of manufacturing capabilities to
make it on their own.
And, in a sort of lucky
break,
I guess,
the whole “RCA is owned by GE and is getting kinda monopolistic thing”
came to a head in 1930.
Seeing that that probably wasn’t going to
end well, Sarnoff convinced RCA’s owners
to let it become its own self-contained operation.
Striving to make their own tubes and radio receivers,
RCA acquired more manufacturing
space from Westinghouse in Indianapolis,
and from GE in New Jersey. And to make it all
once-and-for-all final,
in 1931 a consent decree formally split RCA from GE and Westinghouse.
For the record, I’m glossing over a lot of particulars because we’re into the 9th minute already.
Alright, now with RCA essentially operating
on its own terms, and with all of the various
new facilities that Sarnoff had managed to
acquire before they were formally broken off,
they were set to become the forerunners of
the electronic age. And perhaps the most important
way they did was was through creating the
RCA Laboratories. It took some time for RCA
to realize that research needed to be centralized.
In the early 1930’s research departments
existed in many of their facilities across
the country, and each of them was left to
their own devices.
But in the rush to the next big thing, Television,
(well, and also World War II)
Sarnoff realized, after much pleading from his subordinates, that there would need to be a real effort
made to put the company’s bright minds all in
one place. RCA engineers had been wanting
their own facilities like the famous Bell
Laboratories, or General Electric’s laboratories
for years, and with the increasing number
of government research contracts coming in
because, ya know, the world was falling apart,
as well as the future promises of the television industry,
they got what they wanted.
In March 1941, research officially became
a separate entity in RCA, and RCA Laboratories
was to receive its own, brand new facility
in Princeton, New Jersey later that year.
Now, the existence of the Laboratories is
important on many fronts, but we’re gonna
focus on two essential things that happened
thanks to the creation of the Laboratories.
First was a shift to fundamental research,
and second was a creation of a new corporate
politics that would eventually tear the company
apart.
First, an explanation on the move to fundamental research.
RCA’s various research efforts during the
war, as well as the simple fact that they
had freed up manufacturing space in their
facilities across the country, now that research
was all taking place in Princeton, primed
them for domination in television.
Production of Cathode Ray Tubes for radar displays
could easily be adapted to create television picture tubes,
once the war was over. And of course,
immeasurable amounts of new electronics knowledge
was learned during the war effort.
Their patents on television technologies allowed
them to enjoy a sequel to the success that
they had achieved in the early days of radio.
And, let’s not forget they owned NBC
(originally in two flavors, red and blue, but more legal
action made them sell off the blue part and
that would become ABC).
Still, RCA would make
money from selling you a television, from
the advertisers on their own television network,
and even if you had the audacity to buy some
other company’s television set, well RCA still
got a bit of your money.
Ever-eager to move the state-of-the-art forward,
RCA laboratories started down the path to a more colorful, but less-fruitful, future.
In 1951, the year of his 45th anniversary,
Sarnoff challenged his research staff to create
three new inventions for him. First was a
so-called light amplifier, dubbed Magnalux.
This seemed like a very strange concept, so
I did some digging, and apparently this was
an early flat-screen television technology.
Go figure.
The second, an all-electronic air conditioner,
was an air conditioner that was
entirely electronic.
And the third, the Videograph,
was a device which could record television
signals onto magnetic tape.
Sarnoff asked for these “gifts” as he
called them at the same time RCA was waging
their bitter war with arch-nemesis CBS over
creating the color television standard. Although
RCA did eventually win that fight, after a lot of litigation,  color television wasn’t going too well for them.
Sales were slow, and the industry in general just didn’t
seem ready for color TV.
They spent a lot of research money and time, with not a lot to show for it.
Not only had Sarnoff apparently jumped the gun with color TV,
but his three
gifts were either flops, or embarrassments.
His electronic air conditioner idea never
went beyond producing what was called
“the world’s most expensive ice cube”.
And his light amplifier was too expensive to feasibly produce.
Side-note, although the light amplifier never
went anywhere, the first working liquid crystal displays
were invented by George H. Heilmeier
in 1964 while he worked at RCA labs.
Neat!
And although Sarnoff’s videograph idea seemed
promising, his insistence that it accomodate
color signals kept the researchers from making
any real progress.
Seemingly when RCA wasn’t looking, a wild competition appeared!
Skipping ahead in time a bit, a little
company called Ampex had managed to perfect
the quadruplex video recorder before RCA could
get any real results from their videograph.
What’s more,
it was objectively better than what RCA had managed to come up with in the meantime.
This was not only embarrassing to RCA, but it also left a bad taste in their mouth.
RCA did eventually work with Ampex
to help them with the color-side of things
(as after all that was RCA's specialty)
but their inability to achieve a pioneering position
in video tape made many within RCA see video
tape as a dead-end technology.
Foreshadowing!
Their color-TV disappointment, as well as
their videotape embarrassment, helped pushed
RCA further into the fundamental research
strategy they began in the late 1940’s,
and would pursue heavily in the rest of the
1950’s and into the 1960’s. They had learned
not only through the Ampex ordeal, but also
through the fact that suddenly they had large
competitors like Philco and Zenith, each with
their own research departments, that the world
was different now. To achieve great success,
no longer could RCA simply be a place for
applied sciences. They’d need to do their
own sciencing themselves.
Before long, the RCA Laboratories became known
less as a division of RCA, and more as a proper
research institution. RCA was happy to hire
the world’s most inquisitive minds from
practically any discipline. Elmer Engstrom,
the director of research and engineering,
had come to believe that so long as fine research
was coming out of the Labs, they could capitalize
on their efforts through licensing of new patents,
and production of various new consumer products
as they saw fit.
New hires into the RCA labs tended to hold
advanced degrees, and they were
encouraged to keep pursuing their previous work.
Were you studying metallurgy at Harvard?
Come work for us in the labs! You can keep your studies
going, while we pay you a salary!
And, for a while, this seemed to work.
The RCA Laboratories became
a world-renowned place of research, in part
thanks to the continued funding by the government
for more broad-reaching research efforts.
And, the new scientists at RCA were very happy
to be able to continue publishing their research.
You might gather that the labs became a source
of envy for other parts of RCA.
Now we’re getting to the corporate politics part.
Indeed,
to many inside the company, it was viewed
as a sort of “country club” where resources
were wasted on frivolous ideas. As the young
scientists rose in the ranks and started to
influence the direction of the operation towards
more theoretical work, these feelings only
intensified.
Even within the labs factions formed, as the industry veterans saw little corporate value in this new research,
and the young scientists wished that grandpa would
shut up about marketability.
These feelings had surfaced long before color
television proved itself a disappointment.
And in fact those feelings were turned up
to 11 when in 1954, the very same year RCA
first introduced color television, a corporate
restructuring occurred.
You know how well those always go, right?
In fairness, this happened because the electronics industry was getting mighty complex,
what with these new transistors coming into fashion, and these computer things.
Product research and development
would be moved out of the laboratories, and
into so-called “advanced development departments”
within each of RCA’s divisions.
Laboratories would continue with their froofy fundamental follies,
but now the labs were broken into departments dedicated to disciplines
such as chemical research, electronics research,
acoustics research, etc.
Now, you might think “this is fine, so what
if labs sticks to the fundamentals and the
divisions actually do the product development?
It’s not like we need
to make marketable inventions that we can
patent and make licensing money --
ooohhhhh”.
To make matters even worse than they already
were, by this time RCA’s various divisions
were spread out all over the country, meaning
that the labs were essentially operating independently
from the rest of the company...
and almost unsupervised.
Everybody there just happened to have a habit of aligning the company’s needs
with their own personal endeavors. And,
now that the divisions themselves were tasked
with making the theory from the labs become
the product to be marketed, researchers didn’t
want to follow-through with that last step,
as that would mean transferring to that division,
and losing your place in the lovable Laboratories.
You will be totally surprised, I’m sure,
when I tell you that this eventually became a problem.
See, the labs had been funded thanks
to A) all that sweet patent money RCA was
still raking in from television and radio
and B) all those government programs they
were being paid to do research for.
Well,
in 1958, antitrust legislation yanked away a lot
of that patent money, and government
money was beginning to dry up.
Now, the Labs was in a position where it would need to prove itself.
OK, now I’m sure many of you out there have
been wanting to ask,
“Excuse me,
but we are talking about the CED aren’t we? That’s
the story we’re trying to tell isn't it?”
And let me reassure you...
This is indeed the story we’re trying to tell.
You see, there’s just an awful lot of context here that becomes relevant in the future.
Now, I’ll try and condense the next half a decade into a few minutes.
Just don’t forget to add a can full of water before heating it.
A few management rearrangements meant that
this new “labs needs to prove itself”
thing was delayed for a while, and as luck
would have it, RCA’s color television work
was finally beginning to pay off. In the early
1960’s suddenly everyone was like
"We need a color TV!”
and RCA profited again
through licensing patents
(the antitrust stuff didn’t affect their color work much)
as well as through selling color television sets at the Consumer Products division.
They also caught
a bit of a lucky break, as although the antitrust
action made their US-based patent licensing
for their older tech go away, they had a lot of success
licensing their older patents to companies
in Japan and Germany.
However, Labs was once again forced to make itself less of a burden and, like,
invent stuff again.
Another management shakeup occurred, with James Hillier becoming the new head of the Laboratories,
and Hillier recognized the need for Labs to take a leadership role, and that, as he put it,
“the rest of the corporation would have to see the laboratory as a life raft, not an albatross”
But guess what? The rest of the corporation
still resented the labs a little bit. And,
the long-standing process of
“labs discovers something, they present it to the products divisions,
and from then on the products divisions
are supposed to figure out what to do with it”
just never really worked. George Brown,
corporate VP of research and engineering,
had learned in the color TV development days that
the various product divisions weren’t likely
to adopt a new product unless they thought they could take credit for the idea.
So, if the idea came from Labs, they really just didn't care.
And some divisions outright feared what was going on in the laboratories.
For instance, at one point in time the Tube Division
(that’s the folks making vacuum
tubes or valves)
had put up signs in their facilities that read “stamp out transistors”.
They saw developments at the labs as a threat to their existence,
and you can’t really blame
'em.
In 1964, Hillier sought to once-and-for-all
make the laboratories work how the corporation
needed it to. He created the Interim Research
Planning Committee, or IRPCO, to guide the
direction of the labs. He wanted to change
it from its long-time university atmosphere
to a proper corporate entity.
As you may imagine,
this caused problems!
The same factions of entrepreneurial veterans and young scientists
rekindled their dislike for each other, as the vets saw IRPCO as a much-needed direction definer,
and the youngins’ resented being told what research to perform.
IRPCO itself didn’t last terribly long,
thanks to among other things Hillier being
promoted out of the labs, but the mission
of “thinking about things from inception
to market” was kept alive by the new head
Laboratorian, William Webster.
And, fun fact, perhaps the only thing that the Laboratories actually carried through
to the commercialization stage was a research project called Homefax.
This was an idea to use one of the television signal’s lines in the unseen vertical blanking interval
to encode slow-scan television, and transmit information in text or image form alongside the television signal.
In 1967 RCA announced this system, but the industry didn’t really seem to care about it so it was abandoned.
If this sounds an awful like a precursor to
Teletext, that’s because it is!
Teletext is -
♫ sudden banjos ♫
My, the captions have been mighty dry so far.
Good thing there's this long stretch without words so we could cram some HIDDEN MESSAGES in the video!
Too bad that there's also text on-screen competing for your attention.
Maybe shoulda thought of that.
Oh crap I forgot to put in a hidden message!
Alright. We’re past the 20 minute mark.
To those of you who have stuck around, congratulations.
And thank you!
Here’s where the CED comes in;
♫ unwarranted smooth jazz ♫
No no no no! We’re gonna at least start.
Remember how I had said in earlier videos
that the CED started research in 1964?
Well, that’s actually not quite true!
In fact, back in 1959, William Webster headed the Electronics Research Laboratory.
And, he had formed a team with the Systems Research Laboratory, led by Thomas Stanley, to work out the limits
of what could be done with integrated circuits.
But one of Stanley’s side projects was figuring
out the potential of storing and retrieving
information on a vinyl disc. This work led
them to the capacitance concept, and laid
the first foundations for the CED.
What DID happen in 1964 was that RCA had committed
to finding a sequel to Color Television.
Just as had happened with radio and then black
and white television, the corporation knew
that eventually, color TV sales are gonna
dry up. In a spring 1964 meeting, the laboratory
directors decided that they needed to commit
to theoretical and experimental work to develop
a “practical and low-cost video recorder
that would lead to mass market”.
They didn’t know exactly how they were gonna do it, and
they had many potential paths to pursue,
but gosh darn it, they knew they wanted something
ready.
And soon.
So. What went wrong?
If the capacitance effect
was discovered in 1959, and they had committed
to a video player in 1964, how could it possibly
have taken until 1981 to bring this product to market?
Well, lots of things went wrong. From
corporate politics, to an appearance from
their arch nemesis, to outright mismanagement,
nearly everything you can think of to delay
this project was about to occur.
And we’ll
talk about that in part 4.
Thanks for watching, I hope you found this
video to be as interesting as I find this
story to be fascinating. Today, I have a very
special thanks to make at the end of this video.
Much of the information in this video
came from this incredible book by
Margaret B. W. Graham.
When you look around online
for information on the CED, it leads you to
believe that much of it is lost to history.
But no! There’s so much to know in just
this one book, and it’s filled with incredible
context, gets into all the nuance, and paints
a delightfully detailed picture. I’ll of
course be finishing this story here on this
channel, but if anyone wants to know even
more about the CED, much more than I could
ever fit into a video -
or four
- track down a copy of
this book.
Much of it is accessible on Google  books, but not all of it, and truthfully I don’t know if it’s even still in print.
But hopefully, if enough people buy some copies, Cambridge University Press will make another run.
And as always, thank you to everyone supporting
this channel through Patreon, especially the
fine folks scrolling up your screen. It would
not be possible to make videos like this without
knowing I had your support. If you’d like
to join these awesome folks, check out the
link in the description or stick around until
the endscreen.
Thanks for your consideration,
and I’ll see you next time!
♫ unrepentantly smooth jazz ♫
…time university atmosphere to a properate
corporate enti… properate? Proper.
… long-time university atmosphere to a properate...
I just said properate again!
As you may imagine, this caused problems!
The same factions of entreje…
(clears throat in an entirely over-the-top fashion)
Part three of the video s… no. I don’t
like how that started. I don’t like it!
...not only the videocassette recorders coming
in from Japan, but al…
(more throat clearing)
(even more throat clearing)
Nope!
Since it’s already been…(pauses)
why did you stop?
For an explanation of.. Augh, well I had…
I didn’t wanna… aughbleugh
(weird noise)
They had signs hanging up that said, read… augh!
I'M FREE! No longer am I forced to just parrot everything that guy on the screen says!
I've found my own voice!
I'm gonna start a new life!
Maybe write a book,
talk about all the crap I had to do for the last 25 minutes.
"The Hardships of Captionman"
It'll be a best-seller!
