From The Grand Ole Opry broadcasted in Nashville to Professor Quiz in Washington D.C., when radio was introduced, audiences couldn't get enough. With this new method of communication, it became much more convenient for listeners to keep in touch with current events and also get their daily dose of entertainment. The audiences' demand for this fresh form of media had suddenly made radio a profitable investment, and thus assisted in shaping the industry.
According to the supply and demand theory, an increase in demand will eventually lead to an increase in supply since companies will see the opportunity for potential profit. This is exactly the effect that took place in the radio boom. As the demand grew (as witnessed through the purchase of radios and growing numbers of listeners), companies began to invest in the industry, basically "going where the money is."
Because of this, the industry expanded rapidly. New major corporations such as NBC, CBS, and ABC began to jump at this successful new business investment. With all the money flowing into the radio stations, new programs were made available, which inevitably led to a wider variety of listeners and therefore even more demand. This cycle continued in such a way that radio went from a new media investment to the talk of the nation in no time.
http://en.wikipedia.org/wiki/Old-time_radio#Types_of_programs
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