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History of Record Labels and the Music Industry
by Alex Cosper

1900s 1910s 1920s 1930s 1940s 1950s 1960s 1970s 1980s 1990s 2000s 2010s


- Thomas Edison truly brought power to the people. He was the founder of the modern electrical world. Not only was he the founder of General Electric, which went on to become one of the biggest corporations of all time, his developments paved the way for the motion picture and music industries. Some of the many inventions that came out of his team of inventors included the light bulb, movie camera and the first audio recording device called the "talking machine." The talking machine first appeared in 1877 as an expansion of the telephone concept, which had been introduced a year earlier by Alexander Graham Bell. Edison's original concept of a recording device was essentially an answering machine to record telephone calls.

- Emile Berliner emerged as Edison's technological competitor in the 1880s. The Columbia Phonograph company became a third player in 1889, selling dictating machines, under the leadership of Edward Easton. It was originally the American Graphophone Company set up by telephone inventor Bell, his cousin Chichester Bell and Charles Tainter. When the company was incorporated in the District of Columbia, it began to take on the name Columbia.

- Each major U.S. city had its own phonograph company in the 1890s. Edison established the Edison Speaking Phonograph Company in 1878 then the National Phonograph Company in 1896. Berliner established the American Gramophone Company in 1891 and the United States Gramophone Company in 1893. The Columbia Graphophone Company was the first to go international by setting up offices in London and Paris in 1899.

1900s

- After over a decade in the industry he created, Edison' sales of phonographs climbed to a million dollars for the first time in 1900.

- Eldridge Johnson, an inventor who partnered with Berliner on patents, began issuing discs in 1900 and then formed the Victor Talking Machine company in 1901. Edison continued to release cylinders, which was his original concept.

- The first big three record labels issuing recordings were Edison, Victor and Columbia in the 1900s. During this time Carl Lindstrom was a European record baron, owning Odeon and Parlophone.

1910s

- Edison finally dropped the cylinder format and introduced the Edison Diamond Disc Player in 1913. Victor and Columbia already had taken the lead and issued discs, which became more popular than cylinders.

- In 1915 Felix Kahn, an associate of Carl Lindstrom, formed the OKed Record Company in the U.S. to represent Lindstrom's European labels Odeon and Parlophone. It was also the label that introduced the first blues records.

- Emerson Records was formed in 1916 by former Columbia executive Victor Emerson.

- Brunswick was formed in 1916 in America. Brunswick's UK operations were launched by Chappell Pianos seven years later.

- United Artists was formed in 1919 by early film stars Charlie Chaplin, Douglas Fairbanks and Mary Pickford more as a movie company but eventually it crossed into the record business by issuing movie soundtracks.

- New independent record labels began to spring up in 1917 as most of the original patents regarding record machine and disc manufacturing had expired. Many of these independent labels issued early blues and jazz recordings, such as the Black Swan label, which first appeared in 1921.

- General Electric and AT&T teamed up in 1919 to form the Radio Corporation of America (RCA) as a radio manufacturer. The following year commercial radio debuted in America at Westinghouse station KDKA in Pittsburgh, PA.

1920s

- Brunswick emerged as the most successful new independent label following the post-World War I boom of new record labels. In 1925 Brunswick became even bigger by acquiring the Aeolian Company and Vocalian Records.

- The industry standard became 78 rpm shellac records by 1925, although this format had been in existence since the late 1890s. Speeds had previously varied from 74 to 82 revolutions per minute.

- Columbia went into receivership in 1923 and its UK subsidiary was sold to Louis Sterling. Columbia acquired the OKeh Record Company in 1926.

- RCA (Radio Corporation of America), which manufactured radios, purchased Victor as the label became RCA Victor.

- Edison went out of business two days after the Stock Market Crash of October 1929. Although he was the architect of recording equipment, he was late on conforming to industry standards established by his competitors. One of his problems was that he didn't like jazz, which had become very popular in the twenties. He refused to issue jazz records, only to lose market share to the other two big players.

- Sir Edward Lewis, a British stockbroker, formed Decca Reocrds in 1929 after acquiring the Decca Gramophone Company.

1930s

- Brunswick was bought by motion picture company Warner Brothers in 1930.

- In 1931 Victor introduced its first attempt at 33 and 1/3 rpm vinyl records, but the product didn't take off so it was discontinued after two years.

- The Electric and Musical Industries (EMI) was established in 1931 after the merger of Columbia and the American Gramophone Company. That year EMI opened its Abbey Road recording studios in London. It was also that year EMI began development on stereo recording. One of its new labels included Parlophone, established in the UK in the 1910s.

- In the early 1930s the American Recording Company (ARC) moved in to become a big player in the record industry by buying out small independent labels. ARC leased Brunswick from Warner Brothers in 1931 and also picked up Banner, Cameo, Conqueror, Melotone, Pathe, Perfect, OKeh, Romeo and Vocalion. ARC became a giant in 1934 by purchasing Columbia, which had sold to radio manufacturer Grisby-Grunow a few years earlier, but went bankrupt. In 1938 ARC was bought by CBS network founder William Paley. The Columbia name was kept under the CBS umbrella.

- The two leading record companies of the decade became ARC and Decca, whose UK operation bought Decca's UK branch in 1932. Ted Lewis set up the American division of Decca in 1934. RCA Victor rounded out the big three.

- Alfred Lions founded Blue Note Records in 1939.

1940s

- After being dropped by CBS, Decca US picked up Brunswick in 1942.

- Film studio MGM launched its record division in 1946 as MGM Records.

- London Records was established in 1947 as an American imprint of Decca's UK artists.

- Ampex introduced the reel to reel tape recorder on the market, which had previously been used by the military. Reel to reel became the standard for extended playing time and for master recordings. The initial investor who helped popularize these machines in the recording industry was Bing Crosby, who gave an Ampex deck to Les Paul, who experimented with it and came up with the concepts of over-dubbing and multi-track recording. Paul had been a key pioneer in the development of the solid body electric guitar earlier in the decade.

- Capitol Records became the first major label based on the west coast, as it was established in 1942 by singer Johnny Mercer and investor Buddy De Sylva. It started as Liberty but soon changed its name to Capitol. In 1947 Capitol signed a deal with Decca to issue its material in the UK for three years.

- Mercury Records was formed in 1947. Ahmet Ertegun and Herb Abrahamson launched Atlantic Records in 1947. Other independent labels launched in the forties include Apollo (1943), Excelsior (1942), Jukebox (1944), Modern (1945), Imperial (1945), King (1943) and Chess (1947). Art Rupe changed the name of Jukebox to Specialty in 1946. Fantasy Records was started in San Francisco in 1949 by Max and Sol Weiss. Elektra Records was started by Jack Holzman in 1950. Aristocrat Records was founded in 1947 by Leonard and Phil Chess, who changed the name to Chess Records in 1950.

- In 1948 Columbia introduced its version of the 33 and 1/3 rpm 12" vinyl record while RCA introduced the 45 rpm 7" vinyl microgroove record.

1950s

- In the early 1950s the big five major record labels were Columbia, RCA Victor, Decca, Capitol and Mercury. Capitol had risen to being the fourth biggest label in 1955 when EMI, the biggest UK record operation, bought Capitol for $8.5 million. From 1954-1958 independent labels issuing rock and roll and r&b recordings dominated the charts as the market share for major labels fell dramatically.

- Les Paul and Mary Ford introduced an early form of multi-track recording based on overdubs with their cover of "How High the Moon."

- Texas record store owner Randy Wood launched Dot Records in 1951. Alabama radio personality Sam Phillips formed Sun Records in 1952. The following year he signed Elvis Presley, who was signed to RCA in 1956 after a string of hits on Sun.

- Epic Records was launched in 1953 as a CBS subsidiary for jazz and classical music.

- Paramount Pictures launched ABC Records in 1955. Many of the hit acts on the label were launched through the ABC-TV show American Bandstand as host Dick Clark consulted the label.

- In 1955 Liberty Records was founded by Al Bennett, Sy Waronker, Ted Keep and Chipmunks cartoon creator David Seville. A few years later Liberty acquired Pacific Records because of its successful jazz catalogue.

- Rock and roll music, a blending of r&b and country, and a term coined a year earlier by Cleveland DJ Alan Freed, rose to popularity as the song "Rock Around the Clock" by Bill Haley & His Comets on Decca Records became the first such hit to top the Billboard charts.

- Roulette Records was formed in 1956 by Morris Levy and Phil Khals.

- Atlantic Records launched subsidiary label Atco in 1957. Within a few years the label had its first number one single, which was "Mack The Knife" by Bobby Darin, produced by Ahmet Ertegun.

- The Sony Company introduced the first pocket size transistor radio in 1957, allowing listeners to take music with them wherever they wanted to go. The first actual transistor radio was invented three years earlier by the American Regency Company, based on transistor technology invented by Bell Labs in 1948.

- Jack Warner, a founder of the Warner Brothers motion picture company, launched Warner Brothers Records in 1958.

- Monument Records was established in 1958 by Fred Foster. The label went on to sign Dolly Parton, Willie Nelson and Roy Orbison.

- Scepter Records was launched in 1959 by Florence Greenberg to release records by the Shirelles.

- Chris Blackwell formed Island Records in 1959 in Jamaica as an outlet for reggae music. He relocated his operations to the UK three years later.

- Berry Gordy, a Ford Motor Company assembly line worker, formed Motown Records in Detroit with an $800 family loan.

1960s

- Colpix Records was established in 1960 as the record division of Columbia Pictures, although it had no association with Columbia Records. In 1964 Colpix acquired the Bell/Amy/Mala group. A few years later the pop acts on the label's roster were issued on the Bell label. Colpix became Colgems and began issuing records by the Monkees.

- In 1962 Phonogram was established with a merger between Philips and Siemens. Philips, an electronics manufacturer, began issuing labels in 1950. Philips was also the company that introduced the cassette in 1963. The new conglomeration became the seed to the future giant PolyGram.

- Stax Records was formed by Jim Stewart and his sister Estelle Axton in 1961 in Memphis. The label signed early on with Atlantic for distribution.

- Berry Gordy formed a second label in 1961 called Tamla Records and then a third the following year called Gordy Records.

- MCA Records started in 1962 with the acquisition of Decca USA and early Brunswick and Vocalion catalogues.

- Liberty acquired Imperial Records in 1963.

- The Beatles, who had already been a phenomenon in their homeland of Great Britain for a few years, began topping the American charts starting with "I Want to Hold Your Hand" in Febraury 1964. Their success created a wave called the British Invasion in which several British acts began to overshadow and outdate the American doo-wop and Tin Pan Alley sound.

- The Red Bird label was set up in 1964 by Jerry Leiber and Mike Stoller as an outlet for Tin Pan Alley songwriters such as Goffin and King. After a string of girl-group hits, the label shut down two years later.

- In 1965 Warner Brothers purchased independent labels Valiant and Autumn.

- Kama Sutra Records was formed in 1965 by KS Productions, which was owned by Artie Ripp, Phil Steinberg and Hy Mizrahi. Their first signing, Lovin' Spoonful, was a huge success, but the label began to disappear from the charts after it merged with Buddah later in the sixties.

- Gulf and Western bought Dot Records in 1965, becoming part of the ABC group. ABC bought Dunhill Records from Lou Adler in 1966, creating the ABC-Dunhill label.

- Sire Records was launched in 1966 by record executive Seymour Stein with Richard Gotteher.

- Fantasy was bought by Saul Zaentz in 1968 as the label was given a new life with the success of Creedence Clearwater Revival.

- Major consolidation occurred in the sixties. Warner acquired Frank Sinatra's label Reprise in 1963, a few years after it was launched. In 1966 Seven Arts purchased Warner Brothers films and records to create Warner-Seven Arts, which acquired Atlantic in 1967 for $17.5 million and Elektra in 1968. Then in 1969 it was sold to the Kinney Corporation, who renamed the entertainment group Warner Communications.

- United Artists was purchased by Transamerica Corporation in 1967. GRT bought Chess in 1968. United Artists bought Liberty and Imperial in 1969. Film studio 20th Century Fox began issuing records in the sixties as 20th Century Records. Sam Phillips sold Sun to Shelby Singleton in 1969.

- In the late sixties Philips reorganized its UK labels, emphasizing Mercury and Vertigo while phasing out Fontana.

- Alfred Lions sold Blue Note Records to Liberty in 1967. Neil Bogart launched bubble gum pop label Buddah Records in 1967 to counter drug-influenced music. The Beatles formed Apple Records in 1968. Capricorn was launched in 1969 by Phil Walden, former manager of Otis Redding and Sam & Dave. Chrysalis was formed in 1969 by Chris Wright and Terry Ellis, who were partners in managing Jethro Tull and Ten Years After. It was the licensing deal they made with Island Records, that led to the creation of Chrysalis.

- By the end of the 1960s the top major labels were CBS, Warner Brothers, RCA Victor, Capitol-EMI, PolyGram and MCA. The most successful independent label of the decade was Tamla/Motown. Herb Alpert was another successful independent owner who started A&M Records with Jerry Moss in 1962. MCA became a big player in the sixties by purchasing Decca. CBS had become the biggest label by the end of the sixties, with Warner in second.

1970s

- WEA was formed in 1970 under Warner Communications between the three labels Warner, Elektra and Atlantic to create a huge distribution operation.

- Philadelphia International Records was started in 1971 by Kenny Gamble and Leon Huff.

- ABC-Dunhill bought Dot, Neighborhood and Blue Thumb in the seventies. As the label stopped having big hits, ABC-Dunhill was sold to MCA in the late seventies for $50 million.

- With encouragement from Atlantic head Ahmet Ertegun, David Geffen, who had managed Crosby, Stills & Nash, formed Asylum Records in 1971. A few years later after success with artists such as the Eagles and Jackson Browne, Warner Communications bought Asylum and kept Geffen in charge of the label. Asylum merged with Elektra in 1973 under the Warner umbrella.

- Phonogram merged with Siemens label Polydor in 1972 under PolyGram.

- EMI launched EMI Records in 1972.

- Mike Curb formed his own Curb Records in 1973 after working for MGM.

- "Love's Theme" by Love Unlimited Orchestra, which was written, arranged and produced by Barry White became the first disco record to hit number one in America and marked the beginning of the disco era.

- Sugar Hill Records was set up by Joe and Sylvia Robinson in 1974 to be the first label issuing exclusively rap music. Their first release would come out five years later, which was "Rapper's Delight" by the Sugar Hill Gang.

- By the mid-seventies the top major labels were ABC, Warner, CBS, RCA, EMI and PolyGram. CBS owned Colgems. PolyGram owned Polydor, Mercury, Smash, MGM and Verve. PolyGram took over the United Artists distribution system in the early seventies.

- Neil Bogart made a deal with Warner Brothers to establish Casablanca Records in 1973. The following year Bogart left Buddah, which went bankrupt in 1976. PolyGram bought half of Casablanca in 1977 after a string of disco hits.

- In 1974 MCA switched its UK licensing deal from Decca to EMI.

- Bell Records changed its name to Arista Records in 1975 after hiring former CBS Records executive Clive Davis to run the label. At the end of the seventies Arista was acquired by Ariola, owned by Bertlesman Music Group of Germany.

- Warner Brothers acquired Sire in 1976.

- PolyGram acquired RSO Records in 1976. RSO went on to become a top disco label of the late seventies, highlighted by the success of the Bee Gees and the movie soundtrack Saturday Night Fever, which became the best-selling album to date until Michael Jackson's Thriller in 1983 on Epic Records.

- Beggars Banquet launched in 1976 by Matin Mills as an early indie punk label that signed Gary Numan.

EMI set up a second American label alongside Capitol in 1978 called EMI-America. EMI purchased Liberty in 1979 to put under the United Artists umbrella. EMI was then bought out by UK electrical manufacturing conglomerate Thorn to become Thorn-EMI.

- By the end of the 1970s the top major labels were CBS, EMI, Warner, PolyGram and MCA.

1980s

- IRS Records was formed in the early eighties by Miles Copeland, the brother of Police drummer Stewart Copeland.

- In a joint venture, Philips and Sony teamed up and unveiled their creation of the compact disc in 1981 and began making CDs and players commercially available in 1982.

- Capricorn Records temporarily went out of business in 1980. Neil Bogart set up his final label, Boardwalk, in 1980. It would feature hit act Joan Jett & The Blackhearts. Bogart died of cancer in 1982.

- Rick Rubin and Russell Simmons set up Def Jam, the first definitive rap label in 1984. Their first big success was with Run-DMC a few years later. In 1988 Rubin broke away and launched Def American Records.

- General Electric bought RCA Victor in 1985 and then sold it to BMG in 1986. The next big conglomerate to enter the music field involved the merger of Time and Warner.

- Sugar Hill Records went bankrupt in 1986.

- Sub Pop Records was started in Seattle in 1986 by Bruce Pavitt and Jonathan Poreman.

- CBS acquired Monument in 1986.

- In 1987 Sony purchased Columbia for $2 billion. In 1988 Motown was acquired by MCA. Time and Warner went into a merger which was completed two years later.

- Matador Records is founded in 1989 by Chris Lombardi, who operates out of his New York apartment. It becomes a label dedicated to unique alternative acts. Half of the company will be purchased by Beggars Banquet in 2002.

- By the end of the eighties the top major labels were Sony, Warner, PolyGram, BMG, EMI and MCA.

1990s

- In 1990 MCA was bought by Matsushita of Japan for $6.6 billion as EMI acquired Chrysalis Records a year after acquiring SBK Entertainment. Also in 1990 Jimmy Iovine and Ted Fields launched Interscope Records. The RIAA reported that the cassette continued to be the dominant configuration of record music purchases in 1990. The cassette had 55% of the market compared to 31% for CDs and just under 5% for vinyl LPs. The cassette surpassed vinyl as the most popular configuration in the mid-eighties. CDs finally became the most popular configuration in 1992.

- The World Wide Web was formed (circa 1989-1990) based on the works of Tim Berners-Lee. In 1992 the Moving Pictures Experts Groups (MPEG) approved MP3 as the new medium of storage for computer audio files which approach CD quality.

- PolyGram acquired A&M Records in 1991. EMI Music purchased Virgin Records in 1992. New record labels launched in 1992 included Madonna's Maverick Records (in partnership with Warner Brothers) and the Beastie Boys' Grand Royal (under the Capitol umbrella). Rick Rubin's Def American label changed its name to American Recordings in 1993. Elektra bought 45% of SubPop for $20 million in 1994. SubPop was the original label of several late 80s/early 90s Seattle scene artists such as Nirvana.

- Rhino Records bought the Sugar Hill Records catalogue in 1995, nine years after the rap label went bankrupt.

- David Geffen sold Geffen Records to MCA in 1995 so that he could form a new label with Steven Spielberg and Jeffrey Katzenberg. The new label became DreamWorks. Former Virgin Records owner Richard Branson formed V2 Records in 1996. Alan Meltzer and Steven Lerner launched Wind-Up Entertainment in 1997.

- In 1996 Universal Music Group was formed when Seagram purchased MCA. One of MCA's subsidiaries called Rising Tide, founded by Doug Morris a year earlier, became Universal Records, which acquired Interscope. UMG became the world's leading music company when they acquired PolyGram in 1999. Under this new umbrella, Island Records merged with Def Jam and Mercury. Also under UMG that year Geffen, MCA and A&M all merged together. MCA became Geffen in June 2003.

- In 1996 Thorn EMI de-merged into EMI Group and the Thorn Company. EMI acquired Priority Records in 1998.

- On 10/28/98 President Clinton signed the Digital Millennium Copyright bill. Also that year, Diamond Multimedia introduced the portable MP3 player.

2000s

- Vivendi Universal became the biggest music company in 2000 when Canal+ merged with Seagram. In 2001 AOL merged with Time-Warner.

- In 2001 the record labels moved toward embracing the internet after tearing down Napster and MP3.com for allowing free access to thousands of titles over the internet. Vivendi Universal purchased MP3.com. BMG teamed up with Warner to launch MusicNet while Sony and Universal teamed up to launch Pressplay. Listen.com had already formed a similar online music service called Rhapsody earlier in the year. BMG, meanwhile tried to buy out Napster but in 2002 the deal was blocked by the other labels.

- By 2003 the labels, represented by the RIAA, after having defeated Napster over copyright infringement, took on KaZaa as another website offering peer to peer file swapping. In September 2003 the RIAA began filing lawsuits against people illegally obtaining music online.

- Steve Jobs, head of Apple Computer, revolutionized the music purchasing experience in April 2003 by offering 99 cent song downloads through the iTunes Music Store. In November 2005, The iTunes Music Store became the seventh best-selling music retail outlet in America, surpassing Tower Records. In February 2006 Apple reported that it had sold its billionth song on iTunes. By this point it was clear that iTunes was the dominant online force in selling music, substantially ahead of rivals Napster, Sony, Yahoo's Launchcast or Rhapsody. In early 2008 iTunes surpassed Walmart to became the number one music retailer in America.

- In 2004 Sony Music Entertainment merged with BMG to become Sony BMG, a joint venture between Bertlesmann and Sony Corporation of America. This meant the number of major labels shrank to four, with the three others being Universal, EMI and Warner. - In 2008 Sony Corporation of America announced plans to acquire Bertelsmann AG's 50% share of the Sony BMG, resulting in the label returning to the name Sony Music Entertainment, completely owned by Sony Corporation of America.

- New York Attorney General Eliot Spitzer launched a crackdown on music industry payola in 2005. That year he successfully pressured two of the big four major labels, Sony Music and Warner Music Group to admit involvement in "pay for play" practices with radio stations. The labels agreed to pay huge settlements to help fund the ongoing investigation. In February 2006 Spitzer issued subpoenas to nine major radio chains for their involvement in accepting funds channeled through independent record promoters hired by record labels.

- The Fox Television series American Idol drew more audience than the Grammy Awards according to Nielsen ratings, marking a wake up call to the music industry that more people would rather watch performances from unknown amateurs than the biggest names in the music industry that included Paul McCartney, U2, Madonna and Mariah Carey.

- In 2009, for the first time in history, more Grammy awards went to independent artists than major label artists.

SOURCES:

MtAltra
AllAccess.com
Album Network
Radio & Records
Yahoo.com/Associated Press articles
Video: The Edison Effect - The Phonograh, A&E Television Networks/History Channel, AAE-40051, 1995
America On Record: A History of Recorded Sound by Andre Millard, Cambridge University Press, 1995
The A-Z Book of Record Labels by Brian Southall, Sanctuary Publishing Ltd, Sanctuary House, London, UK, 2000
Music Man: Ahmet Ertegun, Atlantic Records, and the Triumph of Rock'n'roll by Dorothy Jade and Justine Picardie, WW Norton & Co, New York, 1990
Joel Whitburn's Pop Memories 1890-1954: The History of American Popular Music by Joel Whitburn, Record Research Inc, Menomonee Falls, WI, 1986.






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