3. A brief history of the record industry

After the invention of sound recording in 1877, recordings were made individually on wax cylinders for almost two decades. Very few recordings from this period survive.

In the 1890s, it became possible to duplicate cylinders and discs on a large scale and, after the turn of the century, the commercial production of sound recordings really got under way. Half a dozen US, British, German and French companies soon assumed leading positions. These companies operated on a global scale. They established subsidiaries and agencies in as many countries as possible and sent their recording experts to record local music in order to promote more interest in the new invention. During the decade preceding the First World War, records enjoyed an astonishing popularity and cheap spring-operated record players found their way even to remote villages where electricity was still unknown. Between 1898 and 1921 a single company, the Gramophone Co. (UK), is known to have made a total of 200,000 different recordings. The Company made recordings in most European, Asian and North African countries.

The First World War naturally reduced sales, but in the 1920s records again became popular. In addition to the established international companies, there were now a number of smaller local companies. As recording technology was still relatively expensive, however, many small countries still lacked a local industry. For instance, there was no local record industry in Finland, Denmark, Norway or Ireland until the late 1930s, and all recordings made in these countries were produced and pressed by foreign companies.

The worldwide economic depression of the early 1930s and the simultaneous introduction of sound film and radio broadcasting made record sales drop to one tenth of the previous decade's level. Many record companies went bankrupt and information about their activities was lost. In the late 1930s sales increased again, but another world war intervened and not until the 1950s did record sales again reach the peak level of 1929.

In the 1950s, the introduction of microgroove (long playing and single) records and the general improvement in the standard of living increased the demand for records, and for the past three decades world sales have generally been moving upward. With the introduction of magnetic tape, recording became much easier and the number of small independent record companies increased dramatically. A local record industry has now been established even in areas where relatively few recordings were made before the war, such as Africa south of the Sahara, the Pacific and small Caribbean countries.

Pre-recorded cassettes and cartridges and cheap cassette players were introduced in the late 1960s. Cassettes soon became very popular and, especially in Asia and the Arab countries, sound recordings now reached a much wider audience than ever before. The duplication of cassettes is so simple that it has also created the new problem of record 'piracy' - the unauthorized duplication of recordings -which has become a large underground industry especially in countries where copyright legislation has lagged behind technological development.

Today there are literally thousands of record companies in the world, but the structure of the international record industry still reflects historical development summarized above. About half of all records produced in the world are made by a dozen huge international corporations, many of which are direct successors of the industry's pioneers. For instance EMI, the world's second largest record company, is descended from the Gramophone Company that was founded in 1898. These international corporations have subsidiaries or agents in most large countries. They produce many different types of recordings, both internationally known classical and popular music and national idioms. (Melodiya is an exception among the largest companies since it operates solely in the Soviet Union. As the only record company in one of the world's largest countries, however, its record production easily surpasses that of many multi-nationals.)

The scale of activities by the largest ten of those companies may be illustrated by their sales figures in 1977.

CBS (USA) 770 million
EMI (UK) 750 "
Polygram (Federal Republic of Germany/
750 "
Melodiya (USSR) 580 "
Warner Communications (USA) 530 "
RCA (USA) 400 "
MCA (USA) 100 "
Transamerica Corp. (United Artists)
90 "
Bertelsmann (ariola-Eurodisc)
(Federal Republic of Germany)
90 "
A & M (USA) 80 "

This table is based on material compiled by Martti Soramaki and Jukka Haarma.

The thousands of smaller companies usually operate only in one country or region. They often specialize in regional music, in special categories of music or in other specific types of sound recordings. Of course, such companies may vary considerably in size, from enterprises employing, say, a hundred people to being one man's part-time occupation. All are nonetheless small when compared with the world's largest record companies. There are companies specializing in Eskimo music, the songs of one religious sect, reissues of early operatic recordings, sound effects and documentary recordings of the Second World War. The sales of such recordings may be relatively low -often only a few thousand copies and a mere trifle when compared with international hits selling several million -but the combined number of different recordings issued by the small companies is tremendous and their total sales are by no means unimportant.

As an indication of the record industry's output the table set out in Figure 1 may be useful. The figures on the sales of records and pre-recorded cassettes are intended as a preliminary guide. International statistical publications such as the UNESCO Statistical Yearbook do not yet include sound recordings, and the accuracy of these statistics is in some cases questionable. Most of the figures shown are from 1979 or 1980, and were obtained from the International Federation of the Producers of Phonograms and Videograms and from Billboard magazine.

Figure 1