Commercial broadcasting (also called private broadcasting) is the broadcasting of television programs and radio programming by privately owned corporate media, as opposed to state sponsorship. It was the United States′ first model of radio (and later television) during the 1920s, in contrast with the public television model in Europe during the 1930s, 1940s and 1950s, which prevailed worldwide, except in the United States and Brazil, until the 1980s.
Commercial broadcasting is primarily based on the practice of airing radio advertisements and television advertisements for profit. This is in contrast to public broadcasting, which receives government subsidies and usually does not have paid advertising interrupting the show. During pledge drives, some public broadcasters will interrupt shows to ask for donations.
In the United States, non-commercial educational (NCE) television and radio exists in the form of community radio; however, premium cable services such as HBO and Showtime generally operate solely on subscriber fees and do not sell advertising. This is also the case for the portions of the two major satellite radio systems that are produced in-house (mainly music programming).
Radio broadcasting originally began without paid commercials. As time went on, however, advertisements seemed less objectionable to both the public and government regulators and became more common. While commercial broadcasting was unexpected in radio, in television it was planned due to commercial radio's success. Television began with commercial sponsorship and later transformed to paid commercial time. When problems arose over patents and corporate marketing strategies, regulatory decisions were made by the Federal Communications Commission (FCC) to control commercial broadcasting.
Commercial broadcasting overlaps with paid services such as cable television, radio and satellite television. Such services are generally partially or wholly paid for by local subscribers and is known as leased access. Other programming (particularly on cable television) is produced by companies operating in much the same manner as advertising-funded commercial broadcasters, and they (and often the local cable provider) sell commercial time in a similar manner.
The FCC's interest in program control began with the chain-broadcasting investigation of the late 1930s, culminating in the "Blue Book" of 1946, Public Service Responsibility For Broadcast Licensees. The Blue Book differentiated between mass-appeal sponsored programs and unsponsored "sustaining" programs offered by the radio networks. This sustained programming, according to the Blue Book, had five features serving the public interest:
Commercial time has increased 31 seconds per hour for all prime time television shows. For example, ABC has increased from 9 minutes and 26 seconds to 11 minutes and 26 seconds.
Programming on commercial stations is more ratings-driven—particularly during periods such as sweeps in the US and some Latin American countries.
Commercial broadcasting (especially free-to-air) is sometimes controversial. One reason is a perceived lack of quality and risk in the programming (to which more conservative elements respond that it is too risqué much of the time), an excessively high ratio of advertising to program time (especially on children's television), and a perceived failure to serve the local interest due to media consolidation. Commercial radio (in particular) is criticized for a perceived homogeneity in programming, covert politically motivated censorship of content, and a desire to cut costs at the expense of a station's identifiable personality. Politics is a major force in media criticism, with an ongoing debate (especially in the United States) as to what moral standards – if any – are to be applied to the airwaves.
Commercial broadcasting is the dominant type of broadcasting in the United States and most of Latin America. "The US commercial system resulted from a carefully crafted cooperation endeavor by national corporations and federal regulators."
The best-known commercial broadcasters in the United States today are the ABC, CBS, Fox and NBC television networks and the RTEX radio network, based in the United States. Major cable television in the United States operators include Comcast, Charter Communications and Cox Communications. Direct-broadcast satellite (DBS) services include DirecTV and Dish Network.
In an hour of broadcast time on a commercial broadcasting station, 10 to 20 minutes are typically devoted to advertising. Advertisers pay a certain amount of money to air their commercials, usually based upon program ratings or the audience measurement of a station or network. This makes commercial broadcasters more accountable to advertisers than public broadcasting, a disadvantage of commercial radio and television.
In Europe, commercial broadcasting coexists with public broadcasting (where programming is largely funded by broadcast receiver licences, public donations or government grants).