New technological forces reinvent the music industry

In 1924, the phonograph industry suffered the first decline in sales of both phonographs and records in its history, and the decline was precipitous. Interestingly, the fundamental reasons for the decline and the industry's response to the decline are closely interrelated, and that response changed the entire character of that business forever. Without the fundamental technological revolution that occurred in the following year, much of our country's traditional music heritage from that time period would be lost forever and the course of American music would be drastically different than where it is now.

The public's continued acceptance of the phonograph had grown annually since the inception of the industry 37 years earlier, as each year brought technological innovations that resulted in improved sound quality and lower cost phonographs and recordings. By 1923, the market for phonographs had stabilized with the 78 rpm laterally-recorded disc as the industry standard, and that year had been the biggest sales year in history for both phonographs and records.

Thomas Alva Edison's venerable cylinder record while continuously manufactured and improved since 1887 had ceased to be a prominent format after WWI, and his vertically-recorded Diamond Disc Phonographs and records (introduced in 1912), while technologically and sonically excellent, never achieved the market penetration of the relatively uncomplicated, cheap to manufacture, and easy to store 78 rpm laterally-recorded disc. Fundamental patents that allowed the "big three" phonograph companies -- Edison, Columbia, and Victor -- to exert a trust-like control on the manufacture, sales, and distribution of both machines and records for years, had begun to expire in 1917 allowing a number of other manufacturers -- without fear of lawsuits -- to further saturate the market. The greatest impetus for the sudden decline in sales in 1924 however, was the immense popularity of a new technology that made the mechanical technology of the phonograph as a means of reproducing sound seem stone-age in comparison. The new technology was electrical. It was radio.