Chao-Wei Wu
Finding a way out for record industry: the past
Introduction
The correlation between business, society and technology is often complicated. This relationship shapes the human history and the way we live our lives. The recording technology is no exception. The existence of record industry was probably due to the innovation of sound recording technologies. Sony Music Entertainment, EMI, Universal and Warner are the four big names in this industry, which is the business that sells compositions, recordings and performances of music. How does the technology helped the record industry to prosper and decay from begin to the 1990′s will be the main interest of this research.
Thesis
According to Everett Rogers (1962), it is not a spontaneous act to accept an innovation for most of individuals. Rather, it is a process that consists of knowledge, persuasion, decision, implementation and confirmation. (Roger, p.169) These stages will help individuals decide whether or not to accept the innovation. Back to 19 century, the technology of recording was a notable innovation and the process of accepting the innovation may reflect Roger’s theory.
Brian Winston (1998) did similar research form the correlation between media technology and society point of view. He believes that the innovative and demonstrably effective technology has to meet the needs of the society, which is so-called supervening social necessity. (Winston, p.7) The technology of sound recording just meets the entertainment needs of the society and that’s why it survives. After the innovation, the technology has to continuously evolve to meet customers’ needs.
However, as Christensen mentions in Seeing What’s Next (2004), the disruptive innovations may come out as competitors and threaten the incumbents. The competition between the incumbents and the entrants may influence the whole industry as well as the society. This paper will have more in detailed illustration of the correlation between disruptive innovations and their influences on the society.
Overview
The main purpose of this paper is to trace back to Edison’s invention of Phonograph, which is the very beginning of the record industry in order to gain more profound understanding of the industry. Also, we may find how the technology influences the business and the society. Another important factor in the paper is how the record business copes with the new technologies. How do they survive through the threat of disruptive innovations and the competition with each others?
Content
Before discussing the origin of the record industry, we have to understand the origin of the sound recording technology and then lead to the usage of the technology, which includes the entertainment industry as well as the record industry.
Human has sought the ways to record voices since earliest times. According to Oliver Read and Walter L. Welch (1976), the Egyptian has designed a colossal statue of Memnon in about 1490 B.C., which was carved in stone with a series of hidden air chambers. The statue was supposed to emit a vocal greeting each morning to Goddess of the Dawn. Although, the history is questionable, it attests that human has dreamt of a talking machine or something that could reproduce voices for a long time. However, the attempt couldn’t realize until the 19 century, when the long distance technology become a popular research area.
Ever since the telegraph has been invented in 1877, many inventors sight its potential market power, because it meets the social necessity of telecommunication. Furthermore, telegraph was in its infancy and there were more valuable inventions to be made and that made the research to improve the device lucrative. (Millard, 1995) Edison was part of this dynamic new field. He has been doing a lot to increase the efficiency of the telegraph. Of course, he had to face a great competition. A great number of researchers have already started to do the sustaining innovation, which is a way that improves a product in an existing market to meet customers’ expectation. By adopting the sustaining innovation, researchers improve the existing technology of telegraph. However, some have tried to do the disruptive innovation, which is an innovation that creates a new market segment by providing different values for the consumers. The most influential inventor of disruptive innovation was Alexander Graham Bell, who invented something could transmit sounds directly through wire and that is the “Telephone”.
According to Roland Gelatt’s saying in The Fabulous Phonograph, Edison following Bell’s invention, he thought telephone was a luxury product only available to the affluent. Accordingly, Edison considered bringing the instrument into more general use by constructing a small, inexpensive machine with which anyone could record a spoken message. Edison intended to invent something equivalent of sending a written message by telegraph as well as disrupt the market of telephone. Accordingly, he tried to invent some instrument that could record sounds through telephone wire. After some experimentation, he invented a device that could record straight from the air instead of relying on a telephone connection. The device was the famous phonograph. The Americans welcomed it as a major scientific invention at that time. Edison also became famous due to the invention. (Gelatt, 1977)
Edison did little to commercialize the phonograph himself. Actually, Edison soon immersed in experimentation on the incandescent lamp, which he got financial support from a group of investors. (Gelatt, p. 32) When Edison stopped to improve phonograph, it was inevitable that other inventors took over what he left off and proceeded to improve it. The most notable one was Bell’s “graphophone”. Both the phonograph and graphophone were for sale in the market, the competition was quite severe that Bell and Edison even had a legal action to vie for the patent. No matter how hard the patent battle was, the market wasn’t quite accepting this device. There were three great handicaps of the commercial recording: first, the quality of reproduction was extremely poor. Second, the wax cylinders played for a maximum of two minutes, which was too short. Third, there was no method of duplicating cylinders. (Gelatt, p.46)
The beginning of music recording industry
Because of the three major flaws of the recording technology, at the beginning of the phonograph industry, the primary market was intended to be office dictate machine, including businessmen, lawyers, court reporters, who need to record important thoughts or stenographers to replace hand-writing. However, Lewis Glass, who is the manager of Pacific Phonograph Company, set up the first coin-operated phonograph was installed at the Palais Royale Saloon in San Francisco in late 1889. The innovation achieved supervening social necessity that it aroused the public’s interest to listen to recorded music and to taste some noble innovations. It was so success that it generated one thousand dollars in the first five months at the rate of five cents of a time. This proto-jukebox helped launch the modern music industry.
Edison grasped the chance, his phonograph distribute company, Edison Phonograph Company, and other local phonograph distributors all started to make records that could be used in coin-in-the-slot machines or sold them to the public. As a result, various companies making phonographs quickly went into the cylinder business, and some of them redesigned their players so that they were cheaper and simpler, hoping that people would buy them for their homes. (Morton, 2004) However, some of the social theorists were against the technology. They thought the real significance of the phonograph was that it transformed the way people listened to music. Where once music was a unique, live performance, experienced in a public place with a group, now it was heard privately in the home and it was possible to hear the same “performance” over and over. According to this argument, the listening experience was cheapened. (Millard, p.80) Because of the cheap way to listen to music, the music become wide-spread than before and it urged the pop music to come into the market. In other words, it helped music industry to boom.
From the mid-1890s to about 1900, coin-operated phonographs were set up in many cities in the US. Unlike the first installations, these were not in saloons or bars but public places where women and children were welcome. (Morton, p.29) Among these companies, Columbia Phonograph Company, Edison Phonograph Company and Victor Talking Machine Company were the three dominators in the record and record player businesses in the United States. Victor Talking Machine Company adopted Emile Berliner’s disruptive innovation, which was the “disc”. The technology defeated cylinder in a short period. This is the first disruptor of the recording technology; the detailed facts will be examined below.
The interruptive innovation
Emile Berliner was involved in Bell’s research of telephone. After that, he began to research the future of sound recording technology while Edison and Bell was competing with each other. Berliner examined both phonograph and graphophone in order to learn the advantages and disadvantages of each. He found that the wax cylinder, was too soft and fragile for making a permanent recording, thus it need some durable substance. Neither phonograph nor graphophone had solved the problem of low quality sound and neither did they could be mass-produced to be widely disseminated. All of these problems added up to the fact that there was a need for a different type of machine in the field of sound recording in order to get rid of the above problems. Although, Edison and Bell noticed the problems, by the time they overcame many of the cylinder’s defects, the cylinder record was already surpassed by the disc record. (Wile, 1974)
Berliner introduced gramophone, which adopted disc rather than cylinder, to the U.S. citizens in 1894. Although, he was a late entrant to the record market, he took advantage of the delay because others had developed the foundation of a consumer market. Other advantage that the gramophone had over its competitors such as the volume of gramophone was louder than phonograph, the sound is clearer than phonograph, it is easier to handle and some other technical factors. (Morton, 2004) In 1895, English Gramophone Company has established which survives to this day under different corporate owners. These two corporate are HMV record label and the EMI Company. The discs and its players in the late 1890s were successful and the made cylinder makers to close down.
Edison adopted sustaining innovation to face the challenge of gramophone. He intended to make perfected phonograph to regain his market. He and other cylinder makers dedicated to improve cylinders become smaller, less expensive and record longer. Also, he invented some other products like talking dolls to create another market segment. However, his talking doll failed to realize. After few years of struggling, Edison started to produce disc and disc players in 1913. Edison finally abandoned production of cylinder in 1929. (Morton, p.42)
The disc record was a good example of new market disruption. It served the needs of under-shot customers of cylinder records by providing great sound quality and other attributes mentioned above. The competition between phonograph and graphophone also benefited disc record, because the different format might hold some prospect consumers off. After the new market disruptor came into the market, under-shot consumers and non-consumers abandoned cylinder records in a short period of time.
The dismal years
As the 10- and 12- inch discs came to dominate the market, more companies joined the record business, which increased the competition for recording artists and market share. Shortly, there were over 150 companies making record or record players in the 1920′s. The excessive competition along with the even serious problem: the Great Depression made the record industry went into a dismal time. People at that time would do anything to cut unnecessary expenses, including entertainment. That was why the regular broadcast began in the U.S. and Europe gave record businesses hard time, because radio became low-end market disruption. Radio companies created special programs that were more attractive to the public than records. In this period of time half of the record companies went out of business. (Morton, 2004) Columbia along with Western Electric Company researched and introduced “electrical recording” as an improved form of record in the late 1920s. The advantage of electric recording was the great quality of sound, which is much better than the sound of radios at that time. Manufactures hoped that could lure customers back.
Record companies didn’t have many choices to respond to the shrinking market. There were three crucial factors that keep record companies afloat. First, they had to focus on a few market segments that were still sell. One of the market segments was classical music. The buyers were wealthier than average people and they valued the quality of records. Another big buyer was the radio broadcasters, who bought a fair number of records. Finally, record companies were too weak to survive. The phonograph division of the Edison Phonograph Company was closed up in 1929. Victor was bought by the Radio Corporation of America, and Columbia was purchased by the Columbia Broadcasting System. Most of the other names in the industry simply disappeared. (Aitken, 1985)
The second factor that helped record companies during the Great Depression is the movie industry. In the 1930s, motion picture producers of Hollywood were still troubled with how to make silent movies into talkies. Accordingly, they turned to record companies. Record companies provided advanced recording equipments to motion picture producers and got considerable research funding back, thus the recording technology improved a lot during this period of time. (Gomery, 2005)
The last turning point of record industry was the roaring back of jukebox. This new age automatic mechanism could play twenty-four 10- inch discs, any of which could be selected by the user. In 1934, the machine has spread all over the U.S. soon, thus it consumed a great quantity of records. Jukebox also helped to bring customers back to record stores, because each disc held in the machine was easily identified in record stores. (Morton, 2004) Jukebox provided cheap entertainment, which was just what the public at the time of recession need.
World War II as a turning point
World War II was a great time for record business. The governments of the world need it to provide entertainment and propaganda campaigns. The war was also the first war in the history to have its sounds recorded for journalism’s sake. (Morton, 2004) The U.S. Army brought back the technology of magnetic recorders from the German, which soon revolutionized the making of records and movie soundtracks.
Actually, the magnetic recording was introduced around 1899, but it has been forgotten by the U.S. scientists. German companies AEG and I. G. Farben had improved it. Its ability to make very long recordings and recordings under conditions of vibration and shock helped make the “magnetophon” popular for field and telephone surveillance recordings as well. magnetophons showed high quality recordings even better than disc recording. (Clark, 1999) With the introduction of the magnetic recorder, suddenly record and edit the sound is convenient for recorders. If a singer missed a note, a recording engineer could cut out that part of the tape and replace it with a better note. It was also possible with tape recorders to make recordings that could not possibly be captured “live.” It became common for artists to record separately, then “mixed” together later. Artists started to produce different sound effects and it indirectly encouraged the birth of new forms of music, such as Rock and Roll, which deeply influence the American culture. (Millard, 1995)
In 1948 and 1949, the Victor and Columbia companies introduced the new 45-rpm disc for singles and the Long Playing record for albums. These new high fidelity discs marked a new era in the home record player. The disc sustained to evolve and it has become smaller, cheaper and it could record longer. Although, there are multiple advantages of the magnetic tape, it never defeat disc. The biggest reason is the difficulty to handle magnetic tape. The problems of identifying and locating selections on a reel of tape denied listeners the easy access to their favorite songs. (Millard, 1995) This innovation failed to persuade ordinary people to adopt it.
Before the dawn of digital era
The Philips compact cassette was introduced in 1963. It soon becomes the standard format for tape recording and adopted by consumers in a short while. At this stage, the portability of music player is a notable change. As cassette technology improved, it graduated from being a child’s toy to being part of the home stereo system. In 1978 the introduction of the Walkman tape player, which was also marked as high fidelity and portability. The CD was introduced to the public in 1982. It successfully disrupted LP’s market. Because of the prosperity of pop culture and technology, the record industry soared before the digitalized format of music announced. (Millard, 1995)
In the late 1990s, the MP3 standard began to catch on. With the Internet, MP3 has changed record industry profoundly.
Bibliography
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