Music Industry

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MUSIC INDUSTRY. The music industry involves the production, distribution, and sale of music in a variety of forms as well as the promotion of live musical performance. People arguably have bought, sold, and bartered music for as long as it has been made. Street singers, roving minstrels, broadside sellers, and traveling music teachers developed makeshift grassroots music industries that differed more in scale than in kind when compared to the modern music business.

In the mid-nineteenth century, printed sheet music was the industry's primary product. Publishers marketed sentimental ballads and parlor songs for use by the growing number of private piano owners. Advertised nationally, sheet music sales were boosted by the inclusion of songs in touring musical reviews. Blackface minstrelsy, the most popular form of live entertainment in the United States through much of the nineteenth century, provided one of the central vehicles for publishers to acquaint audiences with their wares. Large minstrel companies became celebrities by touring relentlessly through established national theater circuits. Their endorsement of a song could result in significant sales throughout the nation.

Beginning in the early 1880s, publishing firms became concentrated around Manhattan's 28th Street, dubbed Tin Pan Alley by the newspaper writer and songwriter Monroe H. Rosenfeld. The city's publishers perfected the mass production and distribution of songs. Usually paying staff or freelance composers a flat rate per song, Tin Pan Alley firms issued thousands of titles in the hope that a few would hit with the nation's public. Publishers courted popular vaudeville singers, often paying them handsomely to include a song of choice in their act.

Thomas Edison invented the phonograph in 1877. Few initially imagined the invention would be used primarily for music. Yet by the 1890s, "nickel-in-the-slot" talking machines graced urban arcades, introducing the nation to the novelty of mechanically reproduced music. A few companies controlled the patents to competing phonograph technologies. Edison controlled his wax cylinder playback technology. He licensed it to the fledgling Columbia Phonograph Company and the two introduced the first talking machines designed for home use in 1896. By this time, the competing gramophone disk machines and records made by Emile Berliner were already liberally distributed. In 1901, Eldridge Johnson, a Camden, New Jersey, engineer, formed the Victor Talking Machine Company to market Berliner's technology.

These firms raced to establish their technology as the consumer standard throughout the United States and the world. Victor eventually won the technology wars by focusing on the home consumer trade, creating celebrity recording artists such as the opera singer Enrico Caruso, and expanding internationally. In 1901, Victor and licensee Gramophone divided the globe into distinct markets and established distribution networks, retail outlets, and recording operations from China to Latin America. Other companies quickly followed suit.

In 1917, the end of initial patent restrictions resulted in the creation of a number of small firms that catered to previously marginalized consumers. African American and southern white vernacular artists introduced blues, jazz, country, and folk to the industry. In 1919, the Radio Corporation of America (RCA) was founded and began to market consumer-friendly radios. The United States had over one million sets by the early 1920s. Radio raised concerns among copyright holders, especially as broadcasters started selling airtime. Yet phonograph companies soon realized the advertising potential of the new medium. In 1929, RCA acquired Victor and the phonograph and the radio industries continued to increase their ties. Recording artists demanded compensation for the broadcast of their material through the American Society of Composers, Authors, and Publishers (ASCAP).

The Great Depression decimated the industry. Record sales plummeted from 150 million in 1929 to 10 million in 1933. Businesses failed, and the industry was again comprised of a few powerhouse corporations. ASCAP, overseeing royalty collection for the vast majority of published music, continued to demand compensation for radio broadcasts. In 1941, they forbade radio stations to play the music they represented. Their rival, Broadcast Music, Inc. (BMI), offered stations its collection of music that had not been accepted by ASCAP—music by African American composers and artists, working-class styles, and industry unknowns. The result was another wave of decentralization within the industry, as previously scorned artists, styles, and companies gained access to the airwaves and recording studios. The shift opened the door for African American styles to be the guiding force behind the industry's postwar expansion.

Throughout the century, musicians organized to protect their rights and promote their careers. Musician unions typically failed—or refused—to bring most recording and performing artists into their ranks, yet garnered rights for their members, including closed shops and union pay scales in established theater circuits, symphony orchestras, society dance networks, and recording studios. They were less successful in countering the loss of jobs to new technologies and garnering higher royalty rates for record sales.

The postwar decade witnessed three developments that again transformed the music industry: tape recording, the long-playing (LP) record, and the rise of rock and roll. Magnetic tapes finally enabled the easy recording of long segments of music, and the LP allowed their playback. With the concurrent introduction of the 45-rpm single and the growing jukebox trade, the LP heightened sales of new consumer technology, as it would again with the introduction of stereo in the late 1950s. Hundreds of independent labels entered the industry during the era, many promoting regional styles ignored by the majors. Often embraced by smaller radio stations, disks from small startups such as Chess Records and Sun Records introduced the sounds of black rhythm and blues to young audiences throughout the country, contributing to the rise of rock and roll and the reorientation of the industry toward the youth market.

By the late 1960s, the LP dominated industry profits. Major labels soon perfected promotional strategies that combined well-advertised albums, large-scale tours, and airplay on "album-oriented rock" stations. Industry profits increasingly derived from a small number of high-selling artists. The 1981 advent of MTV added the music video to the list of powerful marketing tools at the industry's disposal.

In the last decades of the twentieth century, the music industry was characterized by a wave of corporate mergers and transnational expansion. In 1994, 90 percent of worldwide gross music sales accrued to six multinational corporations. The century ended much as it had begun, even as the industry giants grappled with the copyright repercussions of the digital revolution.


Burnett, Robert. The Global Jukebox: The International Music Industry. London: Routledge, 1996.

Gronow, Pekka, and Ilpo Saunio. An International History of the Recording Industry. London: Cassell, 1998.

Hamm, Charles. Yesterdays: Popular Song in America. New York: Norton, 1979.

Sanjek, Russell. Pennies from Heaven: The American Popular Music Business in the Twentieth Century. Updated by David Sanjek. New York: Da Capo, 1996.

Karl HagstromMiller

See alsoCompact Discs ; Music ; Music Television ; Radio .