“In the broadcasting business, our competition comes from a rapid change in technology.”
–Jim Goodmon, CEO of Capitol Broadcasting Company
Reading through CBC History is a bit like leafing through Broadcasting Magazine and Popular Science at the same time. CBC has a knack for merging the two worlds to stay on the leading edge of media. Seeburg Music is a good example.
In 1961, Mr. A.J. Fletcher, Founder and CEO of Capitol Broadcasting, purchased Woody Hayes Background Music. He developed a profitable business model that delivered background music into buildings via FM radio sub-carrier channels. The business owner would pay a recurring monthly fee to receive ear pleasing music that enhanced the ambiance of the establishment.
Over time, the name was changed to Seeburg Music Group. The group was divided into two operating companies; Seeburg Music Library competed on the national level with other companies providing stores and offices with background music. The other company in the group was Seeburg Sound Systems which operated in North Carolina as a distributor of music and equipment directly to businesses. Seeburg Sound was described as the “retail” division and Seeburg Music Library as the “wholesale” division because it marketed to other distributors.
In 1979, Seeburg launched the first national satellite music service through a network of independent distributors. It was competing with local and national well known names in the industry, including Muzak, 3M Corporation, and AEI. Seeburg positioned itself to be a worthy competitor. By 1984 it could tells its clients that it was the nation’s leading supplier of music to cable systems.
In 1985, Seeburg rebranded its name to Seeburg Music Satellite Network. The name change coincided with moving all the program origination to Raleigh. Up to this point, Seeburg prepared audio tapes for its “Lifestyle” background music and then shipped them to Chicago for playback and satellite transmission. Now Seeburg was able to uplink programs from Raleigh to Chicago via Westar III Satellite. In Chicago, the programs were retransmitted via Satcom IIIR to their final destination. Seeburg was living up to its new “satellite” name that reflected its method of delivery.
Seeburg continued to grow and gain contracts with large companies like HI-NET Communications – subsidiary of Holiday Inns, Inc., RCA Service Corporation, and more cable systems. However, the question that challenged the executives at the “WRAL Mother Ship” was how to move Seeburg into hyper-drive.
Steve Grissom, former VP of Capitol Satellite and Communications Systems at CBC, recently shared his insights about Seeburg during his CBC History interview. Steve chuckled when he recalled the joke, “Seeburg was “5th in a field of four.” Though successful, Seeburg was still in the shadows of Muzak, 3M Corporation, and AEI. The big three dominated the markets by tying up the local distributors who installed equipment for the customers. The challenge for CBC was to find a way to by-pass the distributor network.
Jim Goodmon and Steve Grissom concentrated on a more direct method of delivery. The solution was to develop a small rooftop dish and satellite antenna and an equipment package that cost less than $500, then offer more music options to include jazz, rock, country, adult contemporary, etc. The question was, is this technically possible? Keep in mind, this was before the era of direct broadcast satellites dishes that you see perched on home rooftops today. After consulting with equipment manufacturers, they found that by concentrating the strength of the transponder, the concept of using a small two-foot dish would be possible.
In 1987, after refining the technology, CBC demonstrated Seeburg’s new product that not only by-passed the distributor network, but also provided more channels of music. The plan was coming together. It was time to take on the “Big 3.”
On March 4, 1988 CBC formed a new satellite communications group called Microspace Communications Corporation. The even bigger news was that CBC signed a contract to lease a transponder on the General Electric K-2 Satellite. This was a very, bold and smart move.
The new technology that was first developed for Seeburg revealed that there were many other possible data and radio network applications. CBC engaged the hyper-drive and launched Seeburg into hyperspace, or make that Microspace. After signing the transponder lease with GE executives, Jim Goodmon said, “This is a major step forward for our company in the satellite communications arena. We are proud of the fact that if potential customers are interested in this type of service, Microspace Communications is the only place in the world where it’s available.”
WELL! Seems there is a new sheriff in town. Seeburg made an end run around the Big 3’s distributor blockade. Seeburg got the attention of Muzak, 3M and AEI. None of them had this new technology. All three came knocking on CBC’s door wanting to acquire Seeburg.
CBC sold Seeburg to AEI Music Network, Inc., based in Seattle, Washington on Friday, September 30, 1988. But AEI and the other big companies needed the technology to disseminate their product and there was only one company in the world that could accommodate them. Guess who became early customers to Microspace? You guessed it; Muzak, 3M, and AEI became our customers instead of our competitors. Checkmate.
Thanks to Corp’s Pam Allen for this capcom story & these photos. Pam Parris Allen is a former WRAL newscast producer/director who now works as a researcher and producer on the CBC History Project.