In the early 1920s, the first radio stations were established by radio equipment manufacturers and retailers who offered programs in order to sell more radios to consumers. As time passed, many non-profit organizations followed suit in setting up their own radio stations, and included: schools, clubs and civic groups.
When the practice of sponsoring programs was popularized, each individual radio program was usually sponsored by a single business in exchange for a brief mention of the business' name at the beginning and end of the sponsored shows. However, radio station owners soon realized they could earn more money by selling sponsorship rights in small time allocations to multiple businesses throughout their radio station's broadcasts, rather than selling the sponsorship rights to single businesses per show.
FM RADIO
FM refers to frequency modulation, and occurs on VHF airwaves in the frequency range of 88 to 108 MHz everywhere except Japan and Russia. Russia, like the former Soviet Union, uses 65.9 to 74 MHz frequencies in addition to the world standard. Japan uses the 76 to 90 MHz frequency band.
Edwin Howard Armstrong invented FM radio to overcome the problem of radio-frequency interference (RFI), which plagued AM radio reception. At the same time, greater fidelity was made possible by spacing stations further apart in the radio frequency spectrum. Instead of 10 kHz apart, as on the AM band in the US, FM channels are 200 kHz (0.2 MHz) apart. In other countries, greater spacing is sometimes mandatory, such as in New Zealand, which uses 700 kHz spacing (previously 800 kHz). The improved fidelity made available was far in advance of the audio equipment of the 1940s, but wide interchannel spacing was chosen to take advantage of the noise-suppressing feature of wideband FM.
Bandwidth of 200 kHz is not needed to accommodate an audio signal — 20 kHz to 30 kHz is all that is necessary for a narrowband FM signal. The 200 kHz bandwidth allowed room for ±75 kHz signal deviation from the assigned frequency, plus guard bands to reduce or eliminate adjacent channel interference. The larger bandwidth allows for broadcasting a 15 kHz bandwidth audio signal plus a 38 kHz stereo "subcarrier"—a piggyback signal that rides on the main signal. Additional unused capacity is used by some broadcasters to transmit utility functions such as background music for public areas, GPS auxiliary signals, or financial market data.