The music business is the intersection of art and commerce and is built
around technological innovation and entrepreneurship.
We are currently involved in a paradigm shift from the physical
configuration to the digital format.
And in the midst of this change a lot of people have been saying that the
music industry is dying, the music industry is dead.
Well, I want to tell you that those rumors are greatly exaggerated.
Now, while the recording industry sector of the music business has grown
smaller, other areas like live performance has reached record growth.
The increase in digital sales of both albums and singles, streaming, and
even subscription services are growing as well.
Now, this isn't the first time that people have said that the music
industry is over.
That's been said a number of times over the over 100 year history of the
music industry as we know it.
Noted astronomer and author, Dr. Carl Sagan, the late Dr. Carl Sagan, said
"in order for you to understand your future, you must know your past." All
right, so let's go back.
Let's go back to the beginning of the music industry as we know it.
Let's go back to the 1890's.
In the 1890's, you had traveling shows, minstrel shows, unfortunately,
white people in black face and many black people in blackface singing
songs that the public enjoyed.
Was there a business around this other than the live performance?
Yes, there was.
What was that business?
It was the sheet music business.
Sheet music were selling like records sold in the 20th century.
Sheet music was the product that was being sold other than live
performances, a burgeoning business.
You had entrepreneurs at that time.
You had companies that started, Shapiro, Bernstein, and Company.
You had Mills Music.
Companies that are still around today started as publishing companies
printing sheet music which sold.
At that time you had middle class families who had
pianos in their parlors.
So if they went to a minstrel show or a vaudeville show, a few days after
they'd go to the music store.
And the only way for them to hear those great songs that they enjoyed a
few nights before was to buy the sheet music, and take it home, and start
playing the music and singing the songs.
Great business for a 10, 15 year run, I'd say.
But then you had the shock of a new product that came into existence
shortly after the turn of the century, a new type of product, a new
configuration of music, of songs, the piano roll, the first mechanical
reproduction of a song.
The piano roll was the first mechanical
reproduction to become popular.
The perforations in the paper enabled the keys to go down right in time.
And you'd hear the same melodies of the song that you've heard.
What was the reaction of the publishing companies at that time?
Well, you can bet their reactions were, "Wait a minute.
Our business is over."
Who's going to want to buy the sheet music and have to play the piano and
sing the songs where they can hear the piano being played as a result of the
piano roll?
The music industry's over.
Was it over?
No.
Congress got involved and admitted the Copyright Act to ensure that the
publishers of those compositions got paid a mechanical royalty each time
one of those piano rolls was sold.
Was the industry over?
Did it hurt the print business?
Not at all.
The print business flourished even more and piano rolls
flourished even more.
An early entrepreneur in the recording industry was a man named Harry Pace.
Harry Pace was a partner with the great blues founder, the founder of
the blues, the father of the blues, the great W.C Handy.
And in the early 1920s he saw a market for black female blues singers.
And he started a company in Harlem called Black Swan Records.
Many people think that Motown was the first black owned record company.
But, no, it goes all the way back to the beginning of the record industry.
Then as you got into the 1920s, recordings became popular.
Selling records became popular.
The first popular records were really recorded by black
female blues singers.
Mamie Smith, Ethel Waters, in the early '20s became mega recording stars
as a result of them selling records in the '20s.
How did the publishers feel about that?
There was some concern.
Of course, they were going to get paid their mechanical royalty.
But clearly they thought, oh, my goodness.
The print businesses is over.
Piano rolls didn't kill us.
But records?
People can buy records and hear the songs whenever they want to.
Why would they want to buy the print music?
As it turned out, there was no problem whatsoever with that.
Recordings helped the publishing industry and the print music sales
even to expand further.
Then, of course, we came to the 1930s and the Great Depression.
Decimated the music business.
Once again, people legitimately thought the record industry is over.
People can't afford to buy records.
Vaudeville shows couldn't afford to go out on the road.
People couldn't afford the tickets.
But at that time another technological innovation, radio, which had really
started some years before.
But at that point, they had primarily broadcast news reports.
But in the 1930's radio stations and radio networks decided
to bring bands in.
The bands couldn't work on the road, so they brought them into the studios.
And they let them play their music in the studios.
The recording industry thought, well, once again--
and the publishing industry as well-- thought we're going to have a real
problem here.
It's not P2P that bothered them.
It wasn't peer to peer 100 years ago that concerned people.
It was A to E. Air, radio waves in the air, reaching consumer's ears was the
concern of the recording industry and the publishing industry.
Why is anybody going to want to print sheet music?
Why is anybody going to even buy records when they can hear
this music for free?
Our industry is over.
Was it over?
Not at all.
You had radio stars that became record stars because there was an increase in
the sale of the records as a result of the radio promotion.
Sheet music continued to sell.
William Paley was an entrepreneur as well.
And in 1927 he bought 16 radio stations primarily for the purpose of
advertising his father's cigar business.
But that group of stations, the Columbia Broadcasting System, CBS,
went on to play a prominent role, not only in the music industry, but in
mass media in general.
But then you had the Second World War, and the use of lacquer had to be
restricted.
Lacquer was used to make the records, 78's as they were called because they
moved around the turntable at 78 revolutions per minute.
These were single records.
They called them singles because they had one song on one side and one song
on the other.
But they couldn't make them during the war because all of the materials were
used for the war effort.
Most of the males were away fighting the war.
Once again people said the industry is over.
It's not going to happen.
And once again, that technological innovation, radio, this time with the
creation of the Armed Forces Radio Network, 90 stations across the whole
world creating that A to E experience, but not just for Americans.
That was the first time that many foreigners had the opportunity to hear
this great American music.
And what kind of impact did that make on people across the world?
They're hearing this music, and they've never heard anything like it.
It's got Afro rhythms.
It's got European content.
It's this popular music.
This dance music was something that was completely fascinating to peoples
all over the world.
So what seemed to be one of the darkest hours, clearly on the
political and social scene with the World War, turned out to be the boost
that the record industry needed to further expand after the war.
And there was great expansion of the music industry.
When the soldiers came home, the sale of instruments exploded.
You can bet that there were soldiers in the European front that were in the
ditches, and during their off time when they listened to the Armed Forces
Radio Network, heard the great music of the Duke Ellington
Band and Count Basie.
And you can believe some of them possibly said, you know, if I make it
out of this war alive, when I get home, I'm going to pick up a saxophone
and blow it just like Lester Young.
Yeah, I want to play like "The Prez".
And you can believe me, when they got home, that's exactly what they did.
Instrument sales exploded.
And you had an entrepreneur that came on the scene at that time in 1945 that
saw a great opportunity, an entrepreneur that said here's a need
that needs to be filled.
What is that need?
Well, if these GI's come home from the war and they have the GI Bill, which
was a government program that allowed the government to pay for the tuition
for veterans to go to college or to advance training of some sort, this
entrepreneur said, I know a lot of these vets that are coming back really
want to know how to play like Lester Young.
They want to be a part of a big band.
But the only undergraduate programs or college level programs, advanced
programs for music, were in conservatories that only taught
classical music.
This entrepreneur said, no, no, that's not what they want.
I think they want to understand and be able to play in bands,
big bands, jazz music.
So he started, in 1945, the Schillinger House.
And I'm speaking of Lawrence Berk, the founder of Berkley College of Music.
And you wonder when I said the Schillinger House.
That was the forerunner of Berklee College of music.
In the '50s, Lawrence Berk decided to name the college after his son, Lee
Berk - Berklee.
A great entrepreneurship story that led into the
middle of the last century.
Technical innovation and entrepreneurship were hallmarks of the
music industry in the first half of the 20th century and will become even
more significant in the second half.