1920s to 1950s: Independent labels, Radio, and the Battle of the Speeds
by Louis Rastelli
From Vol. 3 No. 1, 2004

Note: This is a slightly shorter, edited version than the one that appeared in the magazine.

The history of the record industry continues here with its emergence as a part of the mass media that coalesced between the world wars. The industry was already well-established when it was seriously challenged by radio in the mid-1920s. As it would again many times over its history, the industry responded to this challenge by innovating and marketing new kinds of records and record players. The kinds of music that were sold on records also changed significantly during this period, as upstart independent labels appeared to present artists and styles previously ignored by the monopolistic major labels. But before we explain these developments in some detail, it’s worth looking back at how the record industry developed in the first place.

Until the 1920s, the music business was dominated not by major record labels, but by song publishers and big vaudeville and theater concerns. In those days, sheet music consistently outsold records of the same hit songs, proving that most of the music heard in homes and in public back then was played by people, not record players. A hit song’s sheet music often sold in the millions between 1910 and 1920. Recorded versions of these songs were at first just seen as a way to promote the sheet music, and were usually released only after sheet music sales began falling.
Records grew steadily in popularity throughout that time, though, with sales going from 4 million units per year in 1900 to 30 million in 1909, and to over 100 million per year by 1920. But in relative terms, records were still a small part of the entertainment pie, and recording them in the years before 1910 was no more exciting for musicians than acting in early films was for stage actors. Both film and records were considered novelties. Live shows remained the main income source for musicians, and songwriters lived off of sheet music and performance royalties.
In the 1890s, most people listened to records in arcade-like “phonograph parlours,” where each listener would listen to their selection of music or comedy through ear tubes. Coin-operated phonographs and automated player pianos were seen by many musicians as cheapening and commodifying music, perhaps because these machines usually played the most generic pop songs. But coin-ops may have introduced music to a lot of people who otherwise never much cared about it. And since listeners heard the music on earphones, they were able to focus abstractly on it with no visual distractions for perhaps the first time. It may have helped whet their appetite for the then-novel experience of listening to a band or orchestra in one’s home; in any case, sales of home phonographs grew steadily from 1900 to 1910 (with half a million sold in 1910 alone.)
In the early 1900s, only the biggest stars received royalties from record or sheet music sales. Most artists got a flat fee for recording sessions and songwriters were paid per song by sheet music publishers. John Philip Sousa, one of the biggest names at the turn of the century, demanded royalties of 15% of sheet music sales, and was among the first to get royalties from records. Despite making tons of money from it, he disliked the record industry and was convinced it would threaten the livelihoods of musicians in the long term. In 1906 he remarked that “canned music is as incongruous around the campfire as canned salmon by a trout stream.”
Popular opera singer Enrico Caruso single-handedly raised the reputation of recorded music when he signed a contract with Victor in 1904. In 16 years he made up to $5 million from record sales, getting $4000 per song recorded plus a staggering 40 cents in royalties per record (at a time when records cost $1 or $1.50.) The hoopla around Caruso’s signing, combined with growing overall sales, convinced more and more performers that records could be profitable (and respectable.)
However, the industry continued to avoid paying royalties unless the musician was popular enough to demand it. In 1909, a new copyright law passed by the US Congress forced royalties from record sales to be paid to songwriters and publishers, though not to performers. The industry didn’t like the new law at first, but it ended up attracting more talent to the industry. Getting a cut from record sales encouraged publishers to provide record companies with songs at the same time that performers were playing them live. A new context emerged where someone could come home from a show looking forward to buying records of it, or sheet music, or both. Sure enough, sales of everything just kept increasing through to the 1920s.
This was an early example of rival forms of media eyeing each other with suspicion until they figure out how to cross-promote their products. Similar situations occurred in the 20s with radio and the record industry; in the 30s (to some degree) with sound movies and the stage; in the late 40s with television, film and radio; in the 70s with videocassettes and the film industry and today with digital files and the record industry.
Publishers and record companies soon realized that strange things could happen in this new context, such as in 1910 when Has Anybody Here Seen Kelly?, a record by Broadway singer Nora Bayes (co-writer of the classic Shine On Harvest Moon), became a hit for the Victor label, but the play it was supposed to promote bombed. Soon, big stars of the stage such as Billy Murray and Al Jolson became recording stars with huge hits between 1910 and 1920 such as By The Light of the Silv’ry Moon and Alexander’s Ragtime Band.

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