The age of electrical recording began in 1925, using a microphone, vacuum tube amplifier, and electromagnetic recording and playback head and stylus. The recording studio then split into two distinct spaces: the studio itself, where the sounds of the musicians were picked up on microphones; and the control room, where the engineers ran the recording equipment that etched the electrical signals onto a master disc (later magnetic tape).7 Victor’s Orthophonic Victrola (1925) was the first commercial phonograph to take advantage of the expanded fidelity. The difference between acoustic and electrical recording can be heard by comparing Bessie Smith’s approximately seventy acoustic recordings made for Columbia between 1923 and January 1925 (e.g., “St. Louis Blues,” recorded January 1925) with her first electrical recordings, which began in May 1925: “Cake Walking Babies” and “The Yellow Dog Blues” (B. Smith 1991-d).8
In 1929 Radio Corporation of America (RCA) purchased Victor, and Edison stopped manufacturing phonographs and recordings. Coin-operated jukeboxes expanded in the 1930s, reaching 150,000 by 1936, accounting for 40 percent of record sales. After World War II retail record sales surpassed the 1921 high, reaching $224 million in 1947. Independent record labels began expanding, breaking even with a record selling 10,000 copies, helped along with jukeboxes. Hit records in the R&B market in the early 1950s typically sold more than 150,000 copies. The new vinyl record technology gave a boost to sales in the early 1950s, and then sales exploded with the advent of rock and roll: from $277 million (1955) to $600 million (1960). The industry hit its high in retail sales of recordings in 1999 at $14.58 billion and then drastically declined because of internet file sharing to $8.48 billion by 2008.9
The Recording Industry Association of America (RIAA) was formed in 1951 to look after the interests of the record manufacturers. At the time about eight hundred record labels were officially registered, with fewer than forty-five of them doing annual business of more than $20,000. In 1958 the RIAA began certifying gold records (one million singles sold or one million dollars in wholesale album sales); in 1975 half a million albums sold earned a gold record and in 1976 platinum was introduced at one million for albums. In 1989 the new gold benchmark for singles was lowered to half a million copies sold (A. White 1990: viii, 3–4).
Recording-artist guarantees hit a turning point in 1967, after the Beatles renegotiated their contract with EMI. Some San Francisco bands, coming off of Monterey Pop Festival, got $250,000 to sign with a record label. A new high was set by Elton John when he renewed his contract with MCA in the 1970s, guaranteeing him over $8 million for six albums over a five-year period, including a $1.40 royalty on albums (selling for $6.98). The industry was expanding, reaching $2.2 billion in retail sales in 1974. After receiving nine Grammy Awards and his six most recent albums selling over five hundred thousand copies each, Stevie Wonder received a seven-year contract from Motown worth $14 million, the highest up to that point, beginning with Songs in the Key of Life in 1976 (Sanjek 1996: 536–39).
The three earliest record companies, Edison, Columbia, and Victor, set the model for major labels, so-called because of their economic power and national distribution networks. Since the 1930s there have typically been four to six major record labels at any one point. Many smaller local independent record labels filled the voids, sometimes acting as farm teams, only to see their artists picked up by a major.10
RADIO AND TELEVISION
The sudden explosion of nationally broadcast radio beginning in 1922 would have a major impact on the music industry and how people consume music. Musicians’ unions, composers’ rights organizations, record companies, and radio broadcasters were at odds with one another for decades, trying to figure out how to compensate artists from this new medium.
Radio transmission dates to Guglielmo Marconi transmitting Morse code signals several miles through the air via electromagnetic (radio) waves in 1896, building on Heinrich Hertz’s earlier experiments (see figure 4).11 In 1899 Marconi demonstrated his invention in the United States and established the Marconi Wireless Telegraph Company of America. By 1907 Lee De Forest, who was patenting versions of his audion, a vacuum tube that could amplify an electrical signal (a crucial step in radio broadcasting), was transmitting sound (music recordings) from the top floor of a building in New York City, and in 1910 a live broadcast of Caruso from the Metropolitan Opera House, using the new microphone technology, was locally transmitted. Telephones, connected by wire, were in use since 1876; the ability to transmit sound without wires was revolutionary. After the government passed its first licensing law in 1912, the number of licensed amateur radio operators jumped from 322 in 1913 to over 10,000 in 1916. By 1916 American Telephone and Telegraph (AT&T) bought out De Forest’s patents and began to move into radio.
The Radio Corporation of America (RCA) was formed in 1919, taking hold of American Marconi’s assets and operations. The following year General Electric (GE) and RCA pooled their patents with AT&T and its subsidiary Western Electric. The November 1920 Westinghouse Corporation broadcast of returns of the presidential election from their newly licensed station KDKA at their Pittsburgh plant was a milestone. They soon made daily broadcasts and began selling home receivers to a curious public. Westinghouse joined GE, RCA, and AT&T in 1921, pooling about two thousand patents and controlling the radio industry in a monopoly. GE and Westinghouse would manufacture receivers and parts, RCA would market them under their trademark, and AT&T would sell the transmitters and control telephone service. Each of these corporations would soon begin operating their own radio stations.
Smulyan (1994: 1) opens her book on commercial radio broadcasting as follows: “When the first radio station began in 1920, no one knew how to make money from broadcasting.” That would change in 1921, when the U.S. Department of Commerce began issuing licenses in a new class of station, called broadcasting, to twenty-eight stations that year. In the initial boom year of 1922, over five hundred new broadcasting stations were licensed. Sales of radio sets and parts went from $60 million in 1922 to $640 in 1928.
In 1922 ASCAP began a fight with broadcasters to be paid royalties, in the form of an annual licensing fee, for the public performance (radio broadcast) of music composed by its members. Fees were negotiated station by station, ranging from a few hundred dollars up to $5,000 within several years. The radio boom had a devastating impact on the sales of recordings, excepting race records—African Americans had not abandoned records to purchase radio sets for programming that was excluding black musical genres (Smulyan 1994: 25). The sales of Bessie Smith’s blues records may have kept Columbia Records in business at this time (Barnouw 1966: 129).
Stations in the South and Midwest offered country music programs, including WSB in Atlanta in 1922, WLS in Chicago in 1924 (National Barn Dance), and WSM in Nashville in 1925 (which would become the Grand Ole Opry). National networks date to 1926, when AT&T left the broadcasting business and sold its New York station WEAF to RCA, which formed its subsidiary National Broadcasting Company (NBC) to operate the growing web of independent stations. At that point about five million homes in the United States had radios. By 1927 RCA had two networks: Red (WEAF) and Blue (WJZ, which became WABC).
Network radio and then television would provide a new model for the dispersion of U.S. culture. Music of a single artist or group could be instantly disseminated across the nation for the first time. President Franklin D. Roosevelt took advantage of the new medium with his first “fireside chats” in 1933, the intimacy of which helped push through his New Deal agenda.
The Radio Act of 1927 established the Federal Radio Commission, which would become the Federal Communications Commission (FCC) in 1934. All radio licenses were to be voided, impacting the 732 stations broadcasting at the time (including about 90 operated by educational institutions), and new applications would provide a fresh start. In 1927 six hundred sponsors had supported the programming of a quarter of the NBC network’s hours, providing revenue to support noncommercial programming such as religious programs, talks, classical