Network Radio opened the 1948-49 season flush with the sense of renewed popularity and its 14th consecutive year of record high earnings.  The percentage of total stations affiliated with the networks had plunged from 97% to 68%.  But the  drop was easily attributed to the postwar surge of new AM stations the air - 559 in 1948 alone, bringing their total to 1,621. The networks, limited to just one affiliate per city, added 76 of the newcomers to their flocks that grew to 1,104. 
    
Almost unnoticed was the growth of FM radio which had leaped 215% from 150 to 473. But the importance of FM was still a thing of the distant future. Of greater concern to AM radio’s immediate future was the rapid growth of television.  

By December, 1948, another 33 television stations had begun operations with 50 more under construction. New television stations attracted new viewers and TV penetration grew faster than 10,000 new homes per month in 1948.   Momentum for set ownership snowballed to avalanche proportions in early 1949 and a million households were soon in sight.  It was still less than three percent of the radio homes, but television was the new nightly center of family gatherings and neighborhood parties. By coincidence - or perhaps not - the Top 50 Network Radio programs’ average audience dropped by over a million homes during the season. 

Television’s growth was stalled in September when the FCC “froze” all pending television station applications while it considered ways to alter its 1945 rules regarding channel usage and TV signal separation distances between cities. The freeze, originally projected at 90 days, lasted for four years. 

In the four seasons since Bill Paley’s return from World War II with his vow to take CBS to the top of the ratings, the network had averaged a scant 18 shows in the annual Top 50. Paley had America’s most popular program in Lux Radio Theater and  there were encouraging signs from the CBS stable of home grown shows - most notably Arthur Godfrey’s Talent Scouts, My Friend Irma and The Adventures of Sam Spade.  But NBC’s comedy stars continued to dominate the Top Ten year after year.  
    
Paley’s network lacked the power and prestige of radio’s biggest names.  He determined to get them  for CBS - and with an eye to the future, lock them up for CBS-TV which required huge amounts of capital to compete with NBC.   To accomplish the job he borrowed $5.0 Million from Prudential Insurance.  

His first target was the resurgent Amos & Andy - which had scrambled back into the annual Top Ten since its conversion to an NBC half hour sitcom in 1943.  Freeman Gosden and Charles Correll owned their program and its characters.  Paley convinced them to sell their property to CBS for $2.0 Million in September.  Their windfall from the sale was subject to a capital gains tax of 25% instead of an income tax that could soar close to 80%.  

With Amos & Andy back in his fold, Bill Paley landed an even bigger prize for CBS - his friend Jack Benny.  Benny’s move to CBS appeared costly to the comedian.  As 60% owner of his program’s production company, Benny’s personal tax liability after signing with Paley was just over $1.0 Million - more than three times the amount that a capital gains deal would have been. Although the sum was undoubtedly covered by CBS, Benny jumped networks for personal reasons.  

Unlike CBS chief Paley who displayed true interest in Benny‘s welfare, NBC’s David Sarnoff refused to meet with his star of over a decade in an attempt to keep him in the fold.  Instead, Sarnoff assigned an RCA staff lawyer to negotiate with Benny - a former federal prosecutor against whom Benny had a rare personal grudge stemming back to an overblown jewelry smuggling charge in the 1930's. Sarnoff’s thoughtle insults pushed Benny to CBS.

With Benny's endorsement, the personable Paley lured Edgar Bergen, Red Skelton and Burns & Allen from NBC plus Bing Crosby and Groucho Marx from ABC for his 1949-50 schedule. Paley’s loan from Prudential was paid off promptly while Sarnoff’s insensitive blunders with Benny eventually cost NBC millions of dollars in radio and television revenue. 

The FCC complained in August, 1948, that Network Radio schedules contained 40 quiz and giveaway programs that awarded over $160,000 in prizes, every month.  Particular targets of the complaint were ABC’s Stop The Music! and Truth Or Consequences on NBC.  It went conveniently unmentioned by the FCC that the Truth Or Consequences promotions also raised over $3.0 Million for charities. 

The commission floated a broad reinterpretation of the 1934 anti-lottery statutes which it directed at giveaway and quiz shows. The bureaucrats proposed to outlaw any effort on the part of listeners as a requirement to win a radio contest.  - writing a letter, answering the telephone or even listening to a specific program.  Although there were wide loopholes in the edict, ABC, CBS and NBC prepared to file injunctions against it.  The giveaways continued as the argument continued during a year of hearings.

For a decade the networks had taken radio income in huge chunks to finance television’s technological development.  Now they looked to radio to provide television with programming content beyond the “saloon” appeal of boxing, wrestling, baseball and Roller Derby.  The networks’ cannibalization of radio programming to feed television began with just a few nibbles.
    
Arthur Godfrey’s Talent Scouts, the sudden new radio hit for CBS a year earlier, was a simple studio show with a small audience that could easily be covered with just two or three cameras. CBS-TV began simulcasting Talent Scouts on December 6th - replacing Roller Derby.  The radio version of Godfrey’s show lost almost ten percent of its previous season’s rating in the process.  Then CBS simulcast We The People on Tuesday night and its radio ratings slid 12.5%.  ABC simulcast Break The Bank on Friday nights, losing 20% of its radio audience.  Regardless of the danger to Network Radio’s ratings, the adaptation of radio favorites to television inspired imitation - and lots of it. 

By the beginning of the 1948-49 season, ABC‘s Stop The Music! h​ad been on the air for six months and had awarded three jackpot prizes, each with  nearly $20,000 in retail value.  Stop The Music! remained on the air through the summer of 1948 to build a following and attract major sponsors for each of its four quarter-hour segments.  The Sunday night battle resumed in October when Edgar Bergen and Fred Allen returned after summer hiatus to NBC, opposite the upstart giveaway show.   

Then in late 1948, CBS Chairman Paley did a huge favor for Stop The Music!  He hired Edgar Bergen away from NBC and broke up the Bergen-Allen ratings tandem in January, 1949. The ventriloquist left the air for the rest of the season before joining the CBS Sunday lineup at 8:00 ten months later. 

Bergen’s long absence was the giveaway show‘s big break.  Whether he was at NBC or CBS, the soft spoken Scandinavian and his popular alter egos consistently stopped. Stop The Music! in its tracks.  The same wasn’t true for Fred Allen in his fight against Stop The Music!  Instead of keeping Allen in his familiar timeslot of three and a half years and supporting him with a suitable lead-in that could attract respectable ratings, NBC moved him into Bergen’s vacated half hour at 8:00 with disastrous consequences. 

Some reports claim that Allen welcomed the fight.  Indeed, he did offer a tongue-in-cheek reward of $5,000 to any listeners who could prove that they missed a shot at Stop The Music’s jackpot by listening to his show.  But by June and five straight months of third place finishes, Allen was discouraged, bitter and once again in ill-health.  The 55 year old comedian abandoned his weekly series on June 26th, closing out a 17 year career in Network Radio. 

After a successful 16 year association, Jergens Lotion and Walter Winchell parted company in December, 1948, ending the longest sponsor-program relationship in prime time radio. The columnist - reported to be another target of the CBS talent raid - became radio’s first “Thousand Dollar A Minute” star when he signed a widely publicized 90 week, $1.35 Million contract with ABC which had sold his broadcasts to Kaiser-Frazer automobiles in December. 

CBS’s domination of Monday seemed like it would never end - and it never did  as long as the Golden Age lasted.  The network’s peak was 1948-49 when it won every time period from 7:00 until 11:00.     Lever Brothers and CBS repeated with Monday’s Top Three programs packaged from 8:30 to 10:30 - Lux Radio Theater, Arthur Godfrey’s Talent Scouts and My Friend Irma.   The three were again in the season’s Top Ten and Lever again had five of the season’s Top Ten most popular programs. 

Three of Tuesday’s Top Ten shows - comedies headlining Amos & Andy, Red Skelton and Milton Berle - were gone from the NBC schedule. Amos & Andy jumped to CBS while Brown & Williamson Tobacco curiously swapped Tuesday’s Red Skelton Show with its Friday success, People Are Funny.   The Art Linkletter stunt show picked up a fraction of a point and finished in the season’s Top Ten,  but Skelton lost 30% of his audience on Friday and his season rating fell below 20.0 for the first time in seven years.