Technological innovation and entrepreneurship were crucial to the
development of the music industry in the early part of the 20th century.
But by mid-century, there were on a number of new innovations and
entrepreneurs who wanted to participate in the further
development, particularly in the record industry.
One was Ahmet Ertegun, the son of a Turkish immigrant.
He loved black music.
He loved blues.
He loved what was happening on the jazz scene, a danceable form of the
blues called the jump blues.
He started to record company in New York with a partner
called Atlantic Records.
And he was a part of a new wave of music called R&B or rhythm and blues.
He wasn't the only one.
The same thing was happening on the West Coast with Art Rupe, who was the
owner of Specialty Records.
And that was a company that recorded great blues and R&B singers from the
birthplace of popular music--
New Orleans, Louisiana.
You had technological advancement in television, the development of
television, in the 1950s and its impact on radio.
Radio in the early part of the century from the start of radio really had
what were called serial dramatic series, where you had voice actors who
would come in and act the parts out on radio.
Well, the radio station owners and all of the people that participated in
that process were concerned when television came in, because they
thought that type of programming would transfer over to TV.
And in fact, it did.
And it really left a void in the radio market, which was filled by radio
stations playing records to a greater degree than ever.
And of course, that led to some people being disgruntled as well.
They thought that the playing of records and replacing the serial
dramatic series didn't have the same kind of quality as they did the serial
radio programs.
Juke boxes--
a brand new technological invention in the early '50s, latter part of the
'40s and '50s--
changed the music industry as well.
It enabled people to go into a restaurant, to a drug store, put a
coin in the machine, and play any record that they wanted.
Well, that was a little disturbing to a number of people.
Live musicians felt that they were displaced, because instead of bringing
bands into clubs, a club could even have a juke box.
And it could displace them.
You also had record companies that felt if people could go out and have
the records they want to have played at any time, maybe that would cut down
on their record sales.
Well, that didn't prove to be the case after all, because bubbling underneath
of all of this was a new form of music.
And certain cultural shifts, as you had baby boomers of teenagers are born
to soldiers who came back from the war, who were coming of age in the mid
'50s and had a lot of discretionary income and really bought into this new
form of music, which was based on blues, gospel, pop
music, and R&B music--
rock and roll, which exploded.
The music industry exploded, particularly the recording industry,
which went from a total of $200 million in income in 1954 to over $604
million in 1958.
During that four-year period, you had that great growth.
The spirit of entrepreneurship continued to grow, even with some of
the artists during this period.
Sam Cooke, a pop singer as well as an R&B singer, started
his own record company.
He started his own publishing company.
And the great Ray Charles in renegotiating his contract with
Atlantic Records decided to leave that company and go with ABC Records,
because ABC Records allowed him to own his own master recordings.
So the start of entrepreneurship continued to grow over that period.
Other creative talents also became interested in becoming entrepreneurs
in the record industry.
A young songwriter from Detroit, Michigan, Berry Gordy, had written a
couple of songs, a couple of hits as a matter of fact, for a great R&B artist
at the time, Jackie Wilson.
He eventually decided to start his own record company in Detroit called
Motown Records, which went on to become world-renowned and inspire
other creative talents to start their own labels.
One of those other talents was Herb Alpert, who as a band leader and a
trumpeter had tremendous hits with his band Tijuana Brass.
And he decided to partner with a great record man named Jerry Moss to start
and A&M Records in the middle of the '60s.
The explosion of R&B, rock and roll, and soul music led to the British
invasion in the mid '60s.
And the Beatles, who grew up in England hearing the great blues music
and also the great Motown hits, put their own spin on it and came to
America and created a phenomenon like none other.
The sale of records exploded.
At that time 45s and singles on 45s--
two-sided, one song on each side--
were the predominant sales configuration.
Albums, which really started in the 1950s, also were starting
to gain some traction.
And as the development of rock music and the growth of R&B music continued
into the '70s, albums started to really take off and
become very, very popular.
Also during this period in the 1960s, you had the development of
reel-to-reel audiotape and cassette tape, which kind of changed the game.
It enabled people to take the music from the vinyl records and transfer it
to this type of configuration, to the audio tape configuration.
It created great problems.
People felt that they could create their own-- and didn't feel.
They actually did create their own playlists.
And also, they were able to make copies like never before to share with
their friends.
And that became a big concern to the record industry.
As we moved into the '70s and '80s, a number of other things started to
happen, other technological advancements.
Disco music in the mid '70s led to an entire new wave of entrepreneurs
entering the business, starting their own production companies and labels,
selling 12-inch singles to the masses and to the clubs.
The disco clubs played these singles nonstop all night.
But just as disco music hit its peak in the mid '70s, and in '78 or '79,
almost just as fast as its meteoric rise, it was over.
Disco was a dead.
A Chicago radio station had a party at a Chicago Cubs game where they burned
disco records.
And just as fast and at the rapid ascent that disco music made in the
mid '70s, it had just as fast of a death.
And once again, the naysayers said the music industry was dead.
But the fact of the matter is is that the 1980s brought about more
innovation that created a brand new market for the music industry.
Sony released the first portable cassette player--
the Walkman--
in the early part of the '80s.
And it transformed the industry.
That was the first--
well, really not the first, because you had transistor radios back in the
1950s, which kind of transformed the industry as well.
But in the 1980s, the Walkman, the personal cassette player, enabled
people to carry their playlist in their pockets and listen to whatever
music they wanted to listen to.
It transformed the industry.
And it gave it the kind of boost that it needed to try to
build itself again.
And then in 1981 and 1982, MTV, a brand new music television network,
emerged and created the music video market, which spawned great hits over
the 1980s and also created great artists and changed the
industry in a great way.
Of course, you can't ignore the impact of the great Michael Jackson and his
Thriller album, which also provided a boost.
You had another technological development--
the CD--
that came in in the early part of the '80s.
And a lot of people, including me, really had questions about how
effective the CD would be and how it would really catch on.
After all, the CD cost three times the cost of a vinyl record and a cassette.
And when I first heard about it, I said, I would never buy any product
that I would have to pay triple the price for.
I could get three cassettes for the price of a CD.
It can't sound that good.
Well, the marketing people saw differently.
And they really promoted the CD as one having superior digital sound and also
being indestructible.
And I remember the first time really hearing a CD at my cousin's house in
his basement.
And it was a Michael Jackson album.
And as I closed my eyes and listened to the music, it was as if I was in
the studio with Michael.
And that's what really changed it for me.
I could really see the future and really see that CDs would evolve and
be the next evolution of the music business.
Now, around that same time in the '70s and '80s, as albums became very
popular and sold in great numbers on both cassette and in vinyl, as this
new configuration of CDs started to take off in the '80s, major
corporations really took an interest in small independent labels.
They really saw the value of music and selling recordings.
The investment was much lower than making a film.
And the return could be much greater, because you can invest in many more
artists than you could in one film.
So the risk was lessened.
In addition, during that time period, the accounting practices of many of
the independent labels experienced a change.
They became more reliable and more verifiable.
And so the corporations really felt that this was an industry that was
poised for a major corporate investment.
And that's what the industry did.
In the 1990s, CD sales took off, as many people tried to replace their
vinyl and cassette collections with the same records, this time on CDs.
The growth of CD sales in the 1990s was remarkable.
And as a result, record companies and publishing companies became very
valuable commodities.
And major corporation started investing in a big way.
And as the '90s when on, many of these corporations started to merge as well.
But there were other things happening in the music industry at that time, as
the record companies became flush with cash from selling these CDs.
The record companies many times became bloated with employees.
They started signing too many acts.
The quality of the acts might not have been at the level that they should
have been to appeal to the public.
During that time, some people would say that record companies got so
greedy by the end of the 20th century that they stopped releasing singles.
And if you really wanted that one track, that single that you really
loved, you had to buy the entire CD.
Truly, the record companies felt that the good times would never end.
But they'd soon find out otherwise.