Music Industries History Part II: 1950 – 1990

The music industries, as they are known nowadays, derive from technologies to record music and play back recorded music. The figure below shows a summarising timeline with milestones of the music industries since the beginning of the 20th century.

Here is part II of the music industries history triology. This part provides information about the era 1950 – 1990. Click read more!

The environment for the music industries changed in the 1950s. Several social and technological reasons were responsible for the development, which the music culture and industries did in that time (Bennett 2001).

After the Second World War, society changed in its self-image and demographics. It was the time of a baby boom, which caused a high percentage of young people from the late 1950s, and economic growth. This evolved into consumerism and the understanding of leisure time being time for consumption and entertainment rather than for relaxing from work only. Young people were affected from these changes and developed an independent identity, different from their parents’. While the parental generation preferred a more soft sound of music due to their experiences of the Second World War and depressive times before, young people, who grew up in the safer and positive 1950s and 1960s, wanted to listen to more exciting music (Bennett 2001; Kotarba 1994).

Technological changes were the invention of vinyl and tape records, which had better quality and more play duration than former shellac records. Additionally, radio and TV further developed their status as mass media channels. Music industry companies, especially new small record labels, recognised the youth as a new strong target group and used the new technological opportunities. They focused their music releases on the new consumer group, which opened the market for artists such as Elvis Presley, Bill Haley, Chuck Berry, and Buddy Holly. While the four major record labels RCA, Columbia (CBS), Capitol, and American Decca (MCA) had 89 % of the market share in 1949, new smaller record labels with their focus on the new young consumer generation were so successful that the four major record labels only had 34 % market share in 1959 and 25 % market share in 1962 (Huygens et al. 2001; Burnett 1996).

Additionally, the recorded music sales doubled in the USA between 1954 and 1959, and grew, albeit less, in the UK between 1955 and 1959 (Gronow 1983; Huygens et al. 2001).

Reasons for this transformation were following facts. The record industry and radio broadcasters were collaborating rather than competing with each other since the 1940s. Music production equipment got cheaper and, therefore, more accessible to more music companies and producers. Independent distribution companies opened the record market for smaller companies. Small record labels welcomed the new evolving music styles or even were a brand for a distinctive sound or style such as Sun Records (Elvis Presley, Johnny Cash, Jerry Lee Lewis), Atlantic Records (Ray Charles, Joe Turner, Fats Domino, Aretha Franklin), Motown (Marvin Gaye, Jackson Five, Diana Ross, Stevie Wonder), or A&M (Cat Stevens, Quincy Jones, Carole King). Radio stations started to focus on local markets instead of nation-wide markets, which made them accessible for small, independent record labels and producers (Peterson 1990; Lopes 1992; Alexander 1994;  Bennett 2001; Huygens et al. 2001; Renner 2004; Baskerville and Baskerville 2009).

What started in the 1950s, continued in the 1960s: recorded music sales increased again. In this decade, in the UK and USA recorded music sales doubled up to revenues of £ 32 Million (106.4 Million US-$) in the UK and 1.586 Million US-$ in the USA. Without any doubts, the Beatles were one of the most popular artists in that decade. In April 1964, the US sales charts Top 100 listed 12 singles by the Beatles at the same time. These singles were responsible for 60 % of all single sales in three weeks of April 1964.

However, the record industry has still been developing to become an important industry. As an example, in 1969, only one single and one LP vinyl were sold per person, which made only 1 % of leisure spending on average of the UK population (Harker 1992). The late 1950s and 1960s were driven by independent record labels. During the 1970s, major record labels started their race to catch up to their former relevance. They had several strategies for their ‘reoligopolisation’:

  • They signed new talents and established artists.
  • They bought and incorporated independent, competitive record labels and producers.
  • They cooperated with other independent record labels to provide them with financing, distribution and marketing collaborations.

The 1970s market development was less enthralling. In the USA, recorded music sales revenues grew less than they did in the 1960s. They even decreased in 1974 and 1975 a bit, adjusted for currency effects during the oil crisis. In contrast, 1976-1978 were successful years, due to the Disco hype in these years (Gronow 1983; Lopes 1992). As the record industry did not experience a decreasing market for more than 30 years, the recession in the first half of the 1970s was a big problem for the industry. Rock music as the big music style of the 1950s and 1960s could not delight the audience any more as it did before. The new and fresh style ‘Disco’ was the new hope of the music industry, which caused that a large amount of Disco artists and releases, even by artists of other genres. Because of this hype, Disco quickly lost its popularity after a few successful years (Brewster and Broughton 2006).

From 1979, the music industry had to cope with a new bigger recession, which did not only affect the US market but the music market worldwide. The crisis derived from content, demographic, structural, economic and technological problems:

  • Content: The music industry did not have a strong genre any more, as Rock in its several sub genres lost its attraction, and the Disco hype did not last for long (Brewster and Broughton 2006).
  • Demographic Structure: In the 1970s, the ‘baby boom’ generation matured, which changed the demographic structure. These consumers were at the age, in which music is less important, or which the youth-focussing music industries could not handle appropriately (Degenhardt 2010).
  • Market Structure: The demographic structure was a problem for the market system, because the target group of the media companies did not fit with the target group of the music industry anymore. Consequently, promotion on these media channels was less efficient, because it did not appeal the target group as well as it did in the decades before (Degenhardt 2010).
  • Economy: An economical recession period from 1979 until 1982 was triggered by the Second Oil Crisis in 1979, which affected the music sales negatively. Additionally, higher oil prices caused increasing vinyl production costs, because oil is needed for the production of vinyl.
  • Technology: Comparable to the digital music files or CDs albeit more time-consuming, audio cassettes were easy to copy. Although tape copying was less extensive than digital file sharing is today, the record industry was worried about the introduction and quick success of Sony’s portable tape player ‘Walkman’, because tapes became more popular (Degenhardt 2010)

The 1980s brought several innovations, which let the music industries evolve and grow strongly. On the content side, new genres such as New Wave, HipHop, Punk, Heavy Metal became popular, which used new technologies in music production (MIDI, Sampling, Synthesizer). The music industries further established MTV and VH-1 as music television channels, which provided a new promotion channel under the control of the major record labels. On the technological side not only new music production devices (synthesizers, samplers, MIDI-sequencing) had a strong impact, but especially the launch of the CD as a new record device was responsible for lasting revenue growth, because CDs had a higher usability and consumers replaced their vinyl and tape music collection with CDs (Lopes 1992; Degenhardt 2010). However, music tapes were the most popular medium until 1992 (Burnett 1996). The major record labels reacted to the slow dissemination of CDs in the late 1980s with a new return policy on vinyl records, which included much worse return conditions to record retailers for vinyl records than for CDs. Consequently, many record retailer cancelled vinyl records from their stores, which led to a lower availability of vinyl records and pressure on the consumer to change to the new technology (McLeod 2005).

Another important aspect in the 1980s onwards was the larger focus on exploiting and licensing music master rights to media and other companies as a new profitable income stream. Major record labels also recognised the value of the back catalogue, when a lot of old records were sold as CDs, which led them to incorporate big independent labels to exploit their catalogue as well. The success of that time encouraged major record labels to expand their international activities. This affected the rise of multi-national releases and A&R activities in local, non-US or UK markets (Burnett 1996; Huygens et al. 2001).

DeGusta (2011) analyses sales figures of recorded music in the USA from the 1970s until 2009. The table shows that the US revenues were at their lowest point in 1982, lower than in the mid-1970s.

The 1990s have been the most successful decade of the music industry so far. The CD could expand its popularity being the dominant record device. The chart of DeGusta (2011) shows the development of CD, cassettes and vinyl shares. The two latter devices nearly disappeared from the music market towards the end of the 1990s decade. Within the content dimension, Dance music in its plenty sub genres evolved, especially in the UK, Germany and the Netherlands, and became popular internationally (Richard and Kruger 1998; McLeod 2001; Straw 2004; Brewster and Broughton 2006).  HipHop music also grew in popularity. Furthermore, the 1990s opened new opportunities for further international exploitation with the fall of the socialistic forms of government (Debenhardt 2010). The market structure of major and independent record labels moved to an oligopoly, in which 75 % of the US album market share is controlled by the four biggest record labels Universal Music, Sony, Warner and BMG (Hull 2004).

Note:

Text extracted from my PhD thesis on “Organic Artist Development within the Dance Music Genres”.

References:

Alexander, P. (1994). New Technology and Market Structure: Evidence from the Music Recording Industry. Journal of Cultural Economics [Online]. Vol. 18, pp. 113-123. Available from http://www.peterjalexander.com/images/New_Technology_and_Market_Structure.pdf

Baskerville, D. and Baskerville, T. (2009). Music Business Handbook and Career Guide. 9th edition, London: SAGE Publications

Bennett, A. (2001). Cultures of Popular Music. Buckingham: Open University Press.

Brewster, B. and Broughton, F. (2006). Last Night a DJ saved my Life. 2nd ed, London: Headline Book Publishing

Burnett, R. (1996). The Global Jukebox: The International Music Industry. London: Routledge.

Burnett, R. (1997). The Popular Music Industry in Transistion. In: Wells, A. and Hakanen, E. (eds). Mass media & society. Greenwich: Ablex Publishing.

DeGusta, M. (2011). The REAL Death of the Music Industry [Online]. Business Insider – SAI Contributors. Available from http://www.businessinsider.com/these-charts-explain-the-real-death-of-the-music-industry-2011-2

Degenhardt, K. (2010). Musikindustrie – der Tod steht ihr gut [Online]. Zeitschrift Marxistische Erneuerung. Available from http://www.schattenblick.de/infopool/medien/altern/z-137.html

Gronow, P. (1983). The record industry: the growth of a mass medium. Popular Music [Online]. Vol. 3, pp. 53-75. DOI: 10.1017/S0261143000001562. Available from http://journals.cambridge.org/action/displayAbstract?fromPage=online&aid=2626932

Harker, D. (1992). Still crazy after all these years: what was popular music in the 1960s?. In: Moore-Gilbert, B. (eds). Cultural Revolution? The Challenge of the Arts in the 1960s. Oxon: Routledge

Hull, G. (2004). The Recording Industry. 2nd Edition, London: Routledge

Huygens, M. et al. (2001). Co-Evolution of Firm Capabilities and Industry Competition: Investigating the Music Industry, 1877-1997. Organization Studies [Online]. Vol. 22 (6), pp. 971-1011. DOI: 10.1177/0170840601226004. Available from http://oss.sagepub.com/content/22/6/971.full.pdf+html

Kotarba, J. (1994). The Positive Functions of Rock and Roll Music for Children and their Parents. In Best, J. (1994). Troubling Children: Studies of Children and Social Problems. Hawthorne: Aldine de Gruyter.

Lopes, P. (1992). Innovation and Diversity in the Popular Music Industry, 1969 to 1990. American Sociological Review [Online]. Vol. 57 (1), pp. 56-71.

McLeod, K. (2005). MP3s are killing Home Taping: The Rise of Internet Distribution and its Challenge to the Major Label Music Monopoly. Popular Music and Society [Online]. Vol. 28 (4), pp. 521-531. DOI: 10.1080/03007760500159062. Available from http://dx.doi.org/10.1080/03007760500159062

Peterson, R. (1990). Why 1955? Explaining the advent of Rock Music. Popular Music [Online]. Vol. 9 (1), pp. 97-116. Available from http://marathonpacks.com/Files/Why%201955.pdf

Renner, T. (2004).Kinder der Tod ist gar nicht so schlimm – über die Zukunft der Musik- und Medienindustrie. Frankfurt/Main: Campus Verlag GmbH.

Richard, B. and Kruger, H. (1998). Ravers’ Paradise? German Youth Cultures in the 1990s. In Skelton, T. and Valentine, G. (eds). Cool Places: Geographies of Youth Cultures. London: Routledge.

Straw, W. (2004). Cultural Scenes. Society and Leisure [Online]. Vol. 27 (2), pp. 411-422. Available from http://strawresearch.mcgill.ca/straw/loisirarticle.pdf

 

 

 

 

 

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