HISTORY OF THE RECORD INDUSTRY PART 2
THE INVENTION OF THE 45
Columbia wasn’t going to let RCA Victor’s rejection derail the unveiling of the LP. They officially released it on June 18, 1948 with a press conference wherein Wallerstein stood beside a 10-foot-high stack of 78s, holding a foot of LPs which he said contained just as much music. He then played a scratchy 78 followed by the same selection on LP, and the assembled crowd applauded the vastly clearer sound. Columbia’s ads soon claimed that the LP’s “advantages will eventually make it the only way to play music in the home.” Though LPs are still with us today, the fact is that ever since then, there have been multiple ways to play music in the home. RCA Victor set about creating one of these the minute they found out about the LP.
They started by digging through their archives for failed or half-finished experiments, and came across an automatic record-changing device conceived in 1938. RCA decided that they could one-up the LP by creating a record-changer fast enough to essentially allow people to create their own long-playing experiences (much as digital files, whose users enjoy eliminating the filler that’s loaded onto major-label CDs, are now touted.)
The record-changer design included specifications for a new type of record, which RCA Victor also revived, know that to compete with the LP they would also have to improve on the sound of 78s. The new record was to be seven inches in diameter, just like the original Victor 78s from the 1890s, and have a bigger center hole so they would fall into place on the changer without wobbling on the way down. Also, the outer edge of the record and the record label were a tad thicker than the rest of the record, so that the record grooves wouldn’t rub together when records were stacked on top of each other. Lastly, the record would be made from a lighter and more durable new plastic, since the shellac compound 78s were made of would chip or crack after being dropped even a short distance (which was actually why the original record-changer idea was shelved.) The plastic selected was called Vinylite by its inventor, Union Carbide, and was soon being referred to as vinyl.
Some claim that the record speed of 45 RPM was arrived at by subtracting 33 from 78, just so RCA could spite Columbia, but this is untrue. The speed was calculated from groove size and record diameter, much as the 33-1/3, 78 and later 16-2/3 record speeds were. RCA hesitated at first to call their new record 45s, since Columbia had been hyping the 45-minute length of their new LPs all year. But after LPs came out, people began calling 78s 78s (they were just called records before that), so it seemed inevitable that 45s would get called 45s. (For awhile after their introduction, however, 45s were often referred to as “doughnut discs” because of their large holes.)
THE BATTLE OF THE SPEEDS
There had been earlier battles between record formats, the first (and longest) being that between cylinders and flat records. (Both were in wide use from the 1890s to about 1910, with cylinders finally disappearing in the mid-20s.) Even between flat records, there were numerous speeds until most companies finally agreed on 78 RPM around 1900. (Even then, some records in Europe spun at 80 or 100 RPM for some time after.) Until the late 20s there was also confusion between flat records where the needle went up and down (the “Diamond Disks” developed by Edison) and those where the needle goes from side to side (which has since been the standard.) But all those differences occurred when the industry was quite a bit smaller than it was at the end of the 1940s.
RCA spent $2 million in just the first 6 months promoting their new format. They also spent huge amounts converting equipment at pressing plants, and setting up speedier distribution systems to take advantage of the vastly lighter weight of the new records. They promoted the format to stores by promising the ability to ship records almost overnight in order to stock shelves within days of any record becoming a surprise hit. This meant that the 45 did more than just replace the 78: it made regional hits and novelty songs easier to turn into national hits, and increased the importance of “hit singles” in general to record company profits.
The price of 45s was set at 65 cents when they first came out (except for Red Seal 45s, which were 95 cents, just as Red Seal 78s had always cost more.) This was lowered to 49 cents after initial sales were disappointing. By comparison, pop 78s had long cost 50 cents or less by then, and Columbia’s first LPs were priced at $1.25.
The format was officially introduced on March 31, 1949. RCA used a different colour of plastic for each category of music, which they claimed “helps you determine the type of record at a mere glance.” Their categories were folk and country (on “grass green” vinyl); “blues and rhythm” (encompassing the new R&B sound as well as blues and some jazz, on orange vinyl); “international music” (polkas, rhumbas etc. on light blue vinyl); light classical (dark blue vinyl); serious classical (Red Label titles, on red vinyl); children’s music (yellow vinyl) and pop songs (regular black vinyl.) Korean War rationing forced RCA to use just black plastic for all their 45s by 1951, though coloured vinyl was used for both LPs and 45s quite often in the 50s (especially for children’s records.)
A total of 104 singles covering all the categories were released when the format was unveiled. The most noteworthy of these today is the first release in their rhythm and blues category, Arthur “Big Boy” Crudup’s That’s All Right (Mama). It wasn’t a big seller, but among the people who bought it was a kid called Elvis Presley, who learned the song off the record and cut it as his own first single five years later.
The first songs to hit No. 1 on any chart that were available on 45 were one by Perry Como and Riders in the Sky by Vaughn Monroe, less than 2 months after 45s were introduced. Other labels were slower to adopt the 45 as they had been for the LP, probably because their advantage over 78s was a lot less obvious than LPs were, and labels had already just spent a lot of money converting pressing plants (although both Columbia and RCA Victor let other labels use their new plants at first, to help the formats gain a wider foothold.) Capitol was the first label besides RCA to issue 45s (and the first of any label to use both new formats), followed by MGM and Mercury, with Decca, Coral and Brunswick being the last semi-majors to put them out. EMI in the UK was disgusted by this apparent anarchy and vowed to give its customers at least 6 months notice if it ever switched away from 78s (which it did about two years later.)
Although it was obvious the market viewed 45s as a newfangled version of the 78, RCA still contorted themselves trying to convince people they were also better than LPs and perfect for classical music and soundtracks. They sold small cardboard box-set “albums” of 45s that you could stack in a certain order on your record changer to listen to an LP’s worth of material, and touted the space savings with claims that “more than 150 singles or 18 symphonies fit on one foot of bookshelf space.” However, for most classical works and some soundtracks, the sound of the music fading out every three minutes or so and fading back in after a bunch of mechanical noises just couldn’t compare with the seamless play of LPs.
RCA didn’t take long to give up on these ludicrous box-sets and start producing LPs themselves. (It’s thought that their star conductor Toscanini, whose sold over 20 million records in his career at RCA Victor, pressured them to adopt the LP out of jealousy of the other conductors recording on them.) However, they didn’t exactly lose the “battle of the speeds,” since by 1950, Columbia was making 45s, too. (For awhile they tried to compete with the 45 by issuing 7-inch records that played at 33 RPM.) But if there was a clear winner by 1950, it was actually the 78, which in that year outsold both 45s and LPs combined.
Sales of LPs by 1950 were strong enough to convince most that it was here to stay; by 1951 it seemed obvious the 45 would at least eventually replace the 78. But if it weren’t for the US market and RCA’s stubbornness, the 45 may never have lasted, because internationally it only appeared later, if at all. (The first LPs in Europe appeared in 1952 and in some places, the late 50s, with 45s taking even longer. The Soviet Union never adopted 45s at all: their 7-inch singles were all 33 RPM, unwittingly following Columbia’s 1949 exhortation that “One speed is all you need!”)
Manufacturers of record players helped ensure the multi-speed universe by selling models that played at 33, 45 or 78 RPM by 1950. Aside from soundtracks and operas, LPs were used as collections of hit singles aimed mainly at adults, while young people were assumed to want only 45s. The LP format also helped spur the be-bop and post-bop jazz movement, allowing musicians to stretch out on long jams and solos. But listeners still seemed more comfortable with just two songs per record: in 1952 sales of 45s were more than double that of LPs. The 78 was fading fast by then: 45s surpassed them in sales in 1955, and most North American companies stopped making them in 1959.
Though a short transition in comparison with the ongoing multiplicity of digital formats today, the format confusion of the “war of the speeds” found most listeners waiting to see who won before taking sides. Record sales dropped during both years that new formats came out, and took five years to recover to 1947 levels.
But the drop in sales was also due to the fact that most top executives at the majors were growing old and conservative in their musical tastes, refusing to try new things to attract young buyers and sticking to a “they’ll like what we tell them to like” mentality. People had a limited appetite, though, for bland pop songs, light classics and disposable novelty hits, and in 1949 only one out of every 25 songs released by the majors turned a profit at all.
Records were becoming an increasingly expensive gamble, with major-label promotion costs averaging about $25 000 per hit song. (Promotion had also been a large expense in the sheet music days of the 1880s and 90s, with some estimating each title cost publishers $1300 in print advertising, promotional copies and outright payments to musicians to make sure some played the song. Apparently, less than half of all sheet music titles broke even, and just one out of 200 was a hit.)
Since the 50s, major labels have been said to recoup the initial costs of developing new artists for only one out of every eight artists signed. This figure is surely smaller for independent labels, who couldn’t possibly afford such a high rate of duds. But they’re less likely to miss their mark anyway: their smaller size makes it easier for them to know their audiences better, as well as have direct contact and flexibility with their artists. They’re also usually run by people who are passionate about the music they sell, banking on their artists’ talents to wow listeners more than on marketing and copying fads.
But it doesn’t appear that the reduced wastefulness of independents ever translated into higher royalties or more money for their artists. Smaller labels are still at pains to compete with the economies of scale caused by the larger pressing-plant volumes and distribution networks of the majors, who also possess a steady revenue stream in their large back catalogues. The standard royalty artists received in the 40s and 50s on independents was five per cent of sales, not much different from what the majors paid.
THE POST-WAR INDEPENDENTS
The post-war boom boosted the demand for records such that an estimated 1000 new labels formed in the US between 1948 and 1954. (The boom in independents didn’t hit Europe until the 60s, however, delayed by the need to rebuild cities after WWII.) As in the label boom of the early 20s, businessmen realized you could make a big profit by keeping costs low and consistently putting out records that sell just a few thousand copies. It also helped to stick to one style and one regional market, which kept overhead low and made it easy to figure out your audience’s tastes.
Another musicians’ strike aimed at the majors in 1948 prevented them from recording their main stars, some of whom recorded on independents instead. By then, faced with the inability of using the majors’ distribution networks, six of the bigger independents started their own, with better terms than normal for both companies and stores. All these factors made the late 40s a great time to start a label.
As in the 20s, this boom in small labels brought to light some new music styles and many original artists. One example was bluegrass music, then becoming popular in Kentucky and on records released by the Rich-R-Tone label from Campbellsville. There was also a large folk music revival, fueled by labels such as Elektra and Folkways (which also released ethnic music from around the world.) In numerous large American cities, smaller labels sprang up to provide all sorts of ethnic music to immigrants arriving after the war and during the Eastern European upheavals of the 50s.
Atlantic became one of the most successful new labels, begun by the sons of the Turkish Ambassador to the US, Ahmet and Nesuhi Ertegun, who started the label with money they got selling off their large collection of rare 20s jazz records in the late 40s. Their artists revolutionized popular jazz, rhythm and blues, and later soul music, and the label became one of the largest majors in the 70s after combining with Warner Bros. and Elektra. Other labels profoundly affecting popular music with their artists (and with the unique sound of their records) included Chess of Chicago, Sun of Memphis and King of Cincinnati.
Among the many important small jazz labels was Blue Note, started in the late 30s by Jewish jazz fans who’d just fled Germany. The label became popular in the early 50s with major jazz discoveries such as Thelonius Monk and Bud Powell. Jazz music was changing, and the devoted fans who started labels played a major role in its evolution. Often a label had its own sound and style, though roughly the music was divided into the “east coast” style heard on labels such as Riverside, Prestige, Verve and Atlantic and the “west coast style” heard on the Contemporary, Fantasy and Pacific Jazz labels.
Riverside was started by the editors of an early record collector magazine called The Record Changer. The label began by releasing LP collections of out-of-print jazz from the 20s, selling them at low prices just to have the music in circulation again. The label received a boost after founder Orrin Keepnews wrote an exposé of shady major label practices in The Record Changer in 1951. He discovered that RCA Victor, which routinely pressed other labels’ records in their plants when they had spare capacity, was pressing some bootleg albums for a shady label called Jolly Roger. Such labels didn’t own the rights to the music they were releasing and paid no royalties to performers or songwriters. RCA Victor certainly got paid for pressing the records, though, and Keepnews implied that they were giving the bootleggers access to the original master disks. Keepnews’ muckraking paid off when RCA Victor gave him the rights to reissue their old jazz masters from the 20s himself. Armed with these, as well as the rights he bought to old Paramount masters, Riverside became a major re-issue label and later released such legends as Wes Montgomery.
Another noted jazz label was Dial Records, which started as a Los Angeles record store which sold jazz 78s from the 20s that the owner scoured the countryside to collect. The store’s customers pressured the owner to carry more of the new “be-bop” jazz and told him about local gigs where he could hear some of it. After seeing Charlie Parker play, the owner started the label just to record him, and today Parker’s Dial records from 1946-47 are jazz history. (The label was less excited, however, about Parker making them pay half his royalties to his heroin dealer.) When LPs came out, Dial was one of the first independents to use the format to issue full-length versions of jazz sessions.
Some labels grew out of record stores, whose owners had a very good idea of what their audience wanted to hear, as well as of what music wasn’t yet available on record but would sell if it was. Some stores had their recording studios in the same building and were able to play test pressings to customers to gauge whether a record was worth pressing a full run of. (At the time, it was common for fledgling vocal groups to sing on streetcorners for money, and supposedly some would sing on the sidewalk in front of stores in hopes of being invited to cut a record.) Other noted record-stored-turned-labels include the Commodore label in New York in the 30s and the Delmark store in Chicago in the 60s.
But independent labels weren’t always there just to cater to special or regional styles and artists; often they were there to make a fast (and shady) buck. Some such labels employed local singers and bands to record cover versions of current hits. The bands would get a flat fee, the songwriters or publishers would get nothing, and the owners would keep all the profits. Such practices had existed since the days of 78s, with some companies doing what K-Tel was later famous for: cramming more music onto cheaper plastic at a reduced price (and sound quality.) Labels like Prom and Tops had sound-alikes produce countless four-song EPs through the 50s, many of which you can still find in junk shops today.
By the end of the 50s, small labels had made a huge impact on pop music, launching the careers of many huge stars and allowing more obscure artists the freedom to continue innovating new sounds and styles. But many of the artists (as well as the new sounds and styles) developed by the independents were poached by the majors, particularly in the late 50s when they snapped up a slew of singers after initially deciding to wait out the “passing fad” of rock and roll.
However, times were still good for small labels at the end of the decade: independents had released just five of the 168 million-selling singles between 1946 and 1952—less than 3%—but released 101 of the 147 top-ten songs between 1955 and 1959—almost 70%. Of course, over time most of the active small labels from this era were bought up by majors, most of which later became divisions of huge entertainment companies—but new smaller labels never stopped turning up to deliver alternatives to what in 1960 folklorist Alan Lomax derisively termed “automated mass-distributed video music.”

Drawing by Oily Chi
