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C H R I S T I N A L U B I N S K I
Historical Entrepreneurship Case Series
Gramophone: Reimagining Music
We entered a new world of musical and artistic values. One had
to erase all
memories of the music of European opera-houses and concert-
halls: the very
foundations of my musical training were undermined.1
--Fred Gaisberg on his experience of recording in India, 1902
T he professional talent scout Fred Gaisberg (see Exhibit 1 for
picture) found himself at a loss. He had arrived in Calcutta
(Kolkata) at the end of October 1902, to record local artists
whose music could be sold on gramophone discs. This was not
the first scouting trip for the 29-year
old. Gaisberg had worked for his employer, the Anglo-American
Gramophone Co., since 1898 and had
crisscrossed Europe to detect artistic talents—with enormous
success. He proudly reflected on his
sessions with the famous tenor Enrico Caruso in
Milan, only six short months ago. These recordings not
only enhanced Gaisberg's own reputation but also
established the gramophone as an important means
for spreading art and culture to the masses.2
However, in India, Gaisberg encountered new
challenges. The first musicians he recorded were found
with the help of two Indian intermediaries from the
local theater scene. 3 Yet, Gaisberg had his doubts
about the music he heard. Observing one performance
at an Indian theater, he noticed:
Quite arbitrarily, there was introduced a chorus of young
Nautch girls [female
Indian performers] […] accompanied by fourteen brass
instruments all playing in
unison. I had yet to learn that the oriental ear was
unappreciative of chords and
harmonic treatment and only demanded the rhythmic beat of the
accompaniment
of the drums. At this point we left.4
On the way home, Gaisberg pondered: How was he going to
recognize the most promising Indian
performers if their music was so hard to understand? How
would he ever be able to convince his
customers that the gramophone should be considered as a
serious musical instrument? And would
anyone even like the songs that he was about to preserve for all
eternity?
For the exclusive use of M. Hu, 2020.
This document is authorized for use only by Meiyi Hu in
International Business Strategy Winter Semester 2020 taught by
ERIC HUTCHINS, California State Polytechnic University -
Pomona
from Jan 2020 to May 2020.
SCG-557 Gramophone: Reimagining Music
The Origins of the Gramophone Business
The gramophone was a remarkable invention. It was conceived
by the serial inventor Thomas
Edison, who, in 1877, discovered a way to record sound on
tinfoil-coated cylinders. Edison tested the
machine by speaking the nursery rhyme “Mary Had a Little
Lamb” into the mouthpiece, and was
delighted as the machine played his words back to him.5 In his
laboratory notebook, he casually jotted
down the name “phonograph” for the machine. However, as it
turned out, the term phonograph was
commonly used as a synonym for “shorthand;” a method of
rapid writing with abbreviations and
symbols when dictating. Edison and his staff brainstormed
alternatives: Should they call the machine
Polyphone (manifold sounder)? Cosmophone (universal
sounder) or Antiphone (back-talker)? Maybe
Chronophone (time-announcer) or Omphlegraph (voice writer)?
(For a full list of the names
considered, see Exhibit 2 6) In the end, the alternatives were
unsatisfactory and Edison received a
patent for his “Phonograph or Speaking Machine” on February
19, 1878. Competitors, notably
Alexander Graham Bell and Emile Berliner, who further
developed the technology of sound
reproduction, distinguished their products from Edison’s by
using alternative names, such as
“gramophone,” “graphophone,” and “talking machine.”
Like any good entrepreneur, Edison had great plans for his
invention and immediately thought
about commercialization. He opined, “I have invented a great
many machines, but this is my baby, and
I expect it to grow up and support me in my old age.”7 As early
as January 1878, he licensed his
technology to The Edison Speaking Phonograph Company,
which exploited the new machine by
exhibiting it. Edison himself received $10,000 for the
manufacturing and sales rights and 20% of the
profits. However, the machine remained difficult to operate and
the recordings etched on tin-foil could
only play about two minutes of audio and were ruined after a
few uses. Moreover, exhibiting the
machine was not going to generate a constant stream of income.
What if the novelty wore off?
Eager to make his invention a long-term commercial success,
Edison sat down and speculated about
other lucrative applications.8 He explained that the talking
machine “brings its possibilities within the
range of the speculative imaginations” but also admitted to
being “in a somewhat chaotic condition of
mind as to where to draw the dividing line.”9 Working through
the mental turmoil, Edison presented a
list of the twelve most promising applications for his invention:
1. Letter writing and other forms of dictation
2. Books [i.e. reading of existing books]
3. Educational Purposes
4. Music
5. Family Record
6. Phonographic Books [i.e. newly designed for recordings and
to preserve languages]
Christina Lubinski, Professor of Clinical Entrepreneurship at
the University of Southern California, prepared this case. This
case in the Historical Entrepreneurship Case Series was
supported by a grant from the Founder Central Initiative. This
case
was developed from field and archival research. Cases are
developed solely as the basis for class discussion and are not
intended to serve as endorsements, sources of primary data or
illustrations of effective or ineffective management.
Copyright © 2019 Lloyd Greif Center for Entrepreneurial
Studies, Marshall School of Business, University of Southern
California. For information about Greif Center cases, please
contact us at [email protected] This publication may
not be digitized, photocopied, or otherwise reproduced, posted
or transmitted without the permission of The Lloyd Greif
Center for Entrepreneurial Studies.
2
For the exclusive use of M. Hu, 2020.
This document is authorized for use only by Meiyi Hu in
International Business Strategy Winter Semester 2020 taught by
ERIC HUTCHINS, California State Polytechnic University -
Pomona
from Jan 2020 to May 2020.
mailto:[email protected]
Gramophone: Reimagining Music SCG-557
7. Musical boxes
8. Toys
9. Clocks
10. Advertising
11. Speech and other Utterances
12. Revolutionize the systems of telephone and telegraphy
Edison saw by far the greatest potential in the field of office
dictations and “the design [of the
machine] is made with a view to its utility for that purpose.”10
He reasoned that the phonograph would
allow businessmen to dictate from anywhere, keep duplicates as
needed, eliminate many of their clerk
positions, and improve the privacy of business correspondence
(see Exhibit 3 for his own words on
the matter). Eventually, he predicted, stenographers would be
disposable altogether, when
phonographs became so prevalent that businessmen could send
each other cylinders with recordings
rather than letters. In addition, one may argue that the corporate
customers Edison targeted were less
likely to shy away from the steep price of the machine ($150 in
1891; approx. $2,780 today.)11
However, it took almost a decade before businessman Jesse H.
Lippincott purchased the Edison
Phonograph Company as well as technology licenses from some
of the other competitors in the
industry. By 1888, phonographs were leased as office dictating
machines to various companies.
However, financial success eluded the entrepreneurial venture.
Moreover, not everybody celebrated the
arrival of this new technology. The first National Phonograph
Association Convention in 1890
addressed the pressing problem of how to overcome opposition
from stenographers, who feared that
the machine would devalue their skills and bring unemployment
(the film The Stenographer’s Friend;
or, What Was Accomplished by an Edison Business
Phonograph? addressed some of the widely shared
concerns12). When Lippincott fell ill, Edison, as the main
creditor of the business, tried to continue it
but eventually had to declare bankruptcy.
From Office to Opera
As the dictation business failed, Edison and other pioneering
entrepreneurs moved into the
entertainment space. Besides Edison’s new company, the
“National Phonograph Company,” his main
competitors were Edward Easton’s “Columbia Phonograph
Company” (founded in 1887) and Emile
Berliner’s “United States Gramophone Company” (founded in
1894). While Edison recorded sounds on
wax cylinders, Emile Berliner invented the first discs made
initially of hard rubber and later shellac.
Consumers had to decide for either the cylinder or the disc
system, with neither having a strong
competitive advantage. Recordings made on cylinder could not
be played on disc machines, and vice
versa.
The first move into the entertainment space was the opening of
talking machine parlors (see
Exhibit 4) in the 1890s, where customers could listen to a
recording in exchange for a nickel. Gaisberg
mockingly described these penny arcades: “It was ludicrous in
the extreme to see ten people grouped
about a phonograph, each with a tube leading from his ears,
grinning and laughing at what he heard.”13
It was not surprising that Gaisberg rejected the unsophisticated
musical entertainment of the
parlors. Growing up in Washington DC, Gaisberg was a born
musician. As a young child, he sang in the
choir of famous composer and conductor John Philipp Sousa. He
also spent years perfecting his piano
play. At age sixteen, still in high school, he worked part-time
for the Columbia Phonograph Company
on recordings of the whistler John York Atlee, who he also
accompanied on the piano. When Gaisberg
graduated in 1891, he trained with Columbia and became a full-
time producer. In 1894, he met Emile
3
For the exclusive use of M. Hu, 2020.
This document is authorized for use only by Meiyi Hu in
International Business Strategy Winter Semester 2020 taught by
ERIC HUTCHINS, California State Polytechnic University -
Pomona
from Jan 2020 to May 2020.
SCG-557 Gramophone: Reimagining Music
Berliner, the inventor of the disc, and started working for him.
His tasks included scouting for talent,
playing accompaniments, and washing up the acid tanks.14 He
learned the business inside and out.
The accomplished musician Gaisberg was not alone in objecting
to the “nickel-in-the-slot”
machines. The trade journal Talking Machine World reported in
1905, “One of the main obstacles to
the introduction of the graphophone into many homes is, no
doubt, the popular impression that the
talking machine in still only a scientific toy.”15 The penny
arcades were fine to earn a few nickels but
they cashed in on the novelty of the technology and the
curiosity and amazement of the customers. The
burning question, however, was how to generate a consistent
stream of income.
The answer of the US manufacturers was to go after “high-
cultured” customers, who they assumed
could learn to appreciate the gramophone not for its novelty but
for its ability to bring artful music to
their living rooms. Repositioning the gramophone as a serious
musical instrument was not an easy task.
Manufacturers and dealers started by defining the piano and the
violin as the gramophone’s left and
right competitors. C. V. Henkel of the Douglas Phonograph Co.
stressed the “absolute perfection in
sound reproduction” and asked pointedly: “Can you name any
musical instrument that can compare
with the incomparable talking machine?”16 Stores received a
make-over to resemble the most elegant
piano showrooms,17 and furniture makers designed beautiful
high-class cabinets for the gramophones
to fit them into the living rooms of the upper classes.18 When
well-respected piano dealers, such as
Barnett, Samuel & Sons, added talking machine departments to
their stores, the industry breathed a
little easier.19 A trade journal reported, not without pride,
about one piano dealer who admitted that he
used to consider talking machines “beneath my dignity” but now
saw them as “cultivating a latent love
for music among the masses, which in time will create a demand
for musical instruments of every
description.”20
Unfortunately for the industry, critics of the gramophone were
also numerous and vocal. Some
criticized the poor quality of the recordings or the fact that both
Edison’s cylinders and Berliner’s discs
could only play two to three minutes of audio, while musical
live performances at the time often lasted
for hours. Indeed, professional producers, like Gaisberg, had to
cut up longer performances and even
reduced the lengths of a song to fit the new medium. Some
artists objected to the fact that the recordings
eliminated the important interaction between the performer and
the audience, and isolated the music
lover who now enjoyed the music alone, rather than in the
company of family and friends.
Others feared for the effect of the gramophone on American
culture. John Philip Sousa, Gaisberg’s
early teacher, ranted against the gramophones, which “sing for
us a song or play for us a piano, in
substitute for human skill, intelligence, and soul.” He foresaw
“a marked deterioration in American
music and musical taste, an interruption in the musical
development of the country, and a host of other
injuries to music in its artistic manifestation, by virtue—or
rather by vice—of the multiplication of the
various music-reproducing machines.”21 Alice Clark Cook, a
writer for the classical music magazine
Musical America, vexed: “As a diet of canned foods […] injures
taste and digestion, so does a diet of
‘canned’ music lead to the destruction of individual taste, to
indifference and loss of appetite.”22
To counter such claims, manufacturers moved even more
decidedly into the field of “serious” artful
music (e.g., classical music and opera) and engaged in
marketing campaigns highlighting the
gramophone’s role in promoting the arts, not destroying them.
Manufacturers also invested in
specialized education departments to stress the gramophone’s
use as an educational tool for the
promotion of classical music in schools and universities.
Rudolph Wurlitzer Jr. of the eponymous
company argued that the talking machine “offers to persons who
have neither means to attend concerts
of good music, nor ability to play upon an instrument, the
opportunity to become familiarized with
high-class selections and the personal interpretations of the best
instrumental and vocal artists.”23
4
For the exclusive use of M. Hu, 2020.
This document is authorized for use only by Meiyi Hu in
International Business Strategy Winter Semester 2020 taught by
ERIC HUTCHINS, California State Polytechnic University -
Pomona
from Jan 2020 to May 2020.
https://easier.19
https://classes.18
https://tanks.14
Gramophone: Reimagining Music SCG-557
Similarly, John Prescott of the American Record Co. expressed
his belief that “the talking machine is
becoming more and more an important factor in educating the
public taste.”24
By the beginning of the twentieth century, the talking machine
was inextricably intertwined with
education and high culture. A journalist of National Music
Monthly argued that opera had increased in
popularity because of the influence of the gramophone: “People
have heard in their own homes
beautiful excerpts from the greatest operas, and have come to
know their meaning.”25 An observer in
Pittsburg found that, “The talking machine in its earlier stage
was regarded more or less as a toy and
people of culture and refinement refused to buy them. […]
[T]hese objections have been swept aside
and as a result we see among the buyers […] some of the best
and most cultured people of the city.”26
Edward Lyman Bill, the editor of Talking Machine World, even
made a claim to the gramophone’s
ability to bring culture to the entire world: “Every nation should
strive to cultivate the art instinct […]
it is through the talking machine that millions of people in all
lands are enabled to hear the music of
the world’s greatest artists.”27
Into the Unknown
Inspired by such missionary zeal, it is not surprising that an
ever-growing number of gramophone
manufacturers competed not just in the US but also in foreign
markets. Fred Gaisberg’s employer, the
Gramophone Co., was early in targeting foreign markets all
around the world. The company was
founded in 1898 in London, England, on behalf of Emile
Berliner. That same year, Gaisberg moved
from the US to London to set up the first recording studio in
Europe and started his long and successful
career as a record producer. Shortly thereafter, in November
1899, the Gramophone Co. acquired the
famous trademark “His Master’s Voice,” displaying the fox
terrier Nipper listening to a gramophone.
Gaisberg went on a series of recording tours to expand the
portfolio of the Gramophone Company.
He started with a European tour covering Leipzig, Vienna,
Budapest, Milan, Paris and Madrid in the
summer of 1899. Gaisberg remembered: “This expedition gave
me vast experience in recording under
various conditions and produced a rich harvest of musical
records, both exciting and delightful to my
provincial mind.” 28 The results were so promising that
Gaisberg’s manager sent him almost
immediately on a second tour across the British Isles with his
companion William Sinkler Darby. The
two young engineers were regarded as elite employees with
special skills. Within the company, they
were known as “the experts” or “the boys,” partly because of
their young age and partly because of their
pleasure-seeking lifestyle during travels.29 In February 1900,
Gaisberg embarked upon a major Russia
tour, where he recorded for a full six months.30 “I had seen
opera performances on a scale unbelievably
lavish,” Gaisberg noted after the trip. “I had heard and
negotiated with a bevy of the greatest and
perhaps most spoiled artists of that epoch.”31
Another opportunity awaited them: India. In India, English and
Indian musical instrument dealers
began to see talking machines emerge as a high potential line of
business, although they struggled with
adequately serving a market that was spread out over such a
vast territory. In July 1901, Gramophone
Co. sent his agent, John Watson Hawd, to Calcutta to
investigate the emerging opportunity. Hawd
traveled widely in India and concluded: “I think we shall do a
fair business here if we only have the
goods, but until we get native records we shall only be able to
sell to Europeans and they are only 1 per
100 natives.”32 Being on the ground, it became clear to Hawd
that the recordings made in Europe and
the US would not sell in India. Other traveling agents and
scouts confirmed that “American records are
absolutely unknown” and “[o]rchestral records are also little in
demand.”33
Moreover, the many different languages and dialects spoken in
India and the religious diversity
made this a challenging music market. Different groups of
people wanted different music. Hawd was
relentless in telling his superiors: “You must however send one
man to make records.” Not surprisingly,
5
For the exclusive use of M. Hu, 2020.
This document is authorized for use only by Meiyi Hu in
International Business Strategy Winter Semester 2020 taught by
ERIC HUTCHINS, California State Polytechnic University -
Pomona
from Jan 2020 to May 2020.
https://months.30
https://travels.29
SCG-557 Gramophone: Reimagining Music
the Gramophone Co. selected Fred Gaisberg, their most
experienced scout. He was accompanied by his
19-year-old assistant George Dillnutt, the businessman Thomas
Dowe Addis and Addis’ wife. According
to Gaisberg, the aim of this trip was “to open up new markets,
establish agencies, and acquire a
catalogue of native records. [...] As we steamed down the
channel into the unknown I felt like Marco
Polo starting out on his journeys.”34
However, making local recordings proved more difficult than
anyone had anticipated. Upon arrival
in Calcutta, Gaisberg first struggled to get his luggage with the
recording equipment cleared at customs.
After a total of five days of waiting, he declared happily:
“Today we at last succeeded in getting our stuff
out of the Custom House.”35 It took another week before they
had identified the first artists and
Gaisberg noted that the first recordings made on November 8,
were of two nautch girls “with miserable
voices.”36 The accomplished piano player Gaisberg had a hard
time making sense of the Indian music.
A perfectionist, Gaisberg wanted all recordings to be flawless
because unlike live performances, they
were supposed to last. However, it was difficult for him to
evaluate the Indian performances. Edward
Burns, manager of the Columbia export department, confirmed
that the talent scouts traveling around
were generally “strangers in the countries to which they may be
despatched [sic], knowing little, if
anything, of the language and customs of the people and
ignorant of the material from which to choose
suitable recording-making talent.”37
The result was a hodgepodge of questionable material. After
their first six-week stay, Gaisberg and
his crew went home with over 500 masters, of which records
were manufactured in Europe and shipped
to India in April 1903. Other companies followed their example
and recorded local artists all over the
Indian subcontinent. In lieu of any deeper understanding of the
music, they relied on easily observables
proxies, most importantly language variety. Recording
engineers sent detailed reports on the different
dialects and languages spoken in all parts of the world.38 The
Gramophone Co. instructed its local agent
in India to extend the catalogue by 2,500 records in order to
cover the twelve languages that were
considered most popular.39 The lack of instructions towards
musical genre or style mirrors the failure
to understand the local music; however, the decision to provide
music in a variety of languages was a
first step toward diversifying the portfolio.
Unexpectedly for many of the scouts, quite a few of these
Indian recordings turned out to be very
successful. “To be sure the selections are weird,” argued one
recording engineer about his activities in
India, “but they sell like hot cakes.” Following a market rather
than an art logic, this recording engineer
was optimistic about the future: “It may appear queer, but India
is the best place on earth for talking
machines. The masters must be made on the spot, and be native
music … but India … appears to me a
great field for American enterprise in this line.”40
Reliable local middlemen could have been extremely valuable in
this context, but they were also rare
and highly sought after in the competitive Indian market.
Gaisberg first turned to the English agents
living in India but was disappointed: “They could be living on
another planet for all the interest they
took in Indian music.”41 A German competitor, Beka Records,
attempted to collaborate with locals in
Calcutta. Heinrich Bump, owner of the company and lead
recording scout, asked a partner in Bombay
to introduce him to a friend in Calcutta. However, that friend
was unable to accommodate them and
instead referred them to a pal, who again passed their wishes on
to another associate. The latter was
supposed to engage the right artists and attend the recording
sessions to guarantee that performers
sing the right pieces in the pre-selected languages. However, the
lengthy negotiations between the
partners yielded few results, and eventually Bump felt that he
was being taken advantage of.42
Both the Gramophone Co. and Beka worked with an Indian
trading company, Valabhdas Lakhmidas
and Co. with great experience in record sales. Because their
services were so valuable, Beka offered
Valabhdas favorable contract conditions, sending large
quantities of goods on consignment and
6
For the exclusive use of M. Hu, 2020.
This document is authorized for use only by Meiyi Hu in
International Business Strategy Winter Semester 2020 taught by
ERIC HUTCHINS, California State Polytechnic University -
Pomona
from Jan 2020 to May 2020.
https://popular.39
https://world.38
Gramophone: Reimagining Music SCG-557
imposing no minimum sales. Gramophone Co. feared that this
practice put them at a disadvantage to
Beka, and the Germans indeed managed to complete 1,000
Indian records with the help of their local
partner.43 Eventually, Valabhdas and Beka entered an exclusive
agreement. In addition to the musical
artists that Valabhdas selected, they also recorded political
speeches and patriotic songs, which became
very popular in the context of an anti-colonial protest movement
in 1906. Gramophone Co. considered
the competition inferior: “The ‘Beka’ Records (Native) are . . .
poor stuff. No class whatever, and not to
be compared with our Records.”44 However, they sold well and
Gramophone Co. debated the option of
reissuing records that had been withdrawn from the catalogue at
a cheaper price “as a measure for the
destruction of the Beka Agency.”45
Over time, the internationalization departments became better at
identifying characteristics of
foreign music outside of language. Edward Burns of the
Columbia export department stressed how he
and his colleagues studied migration patterns of different ethnic
groups, the musical tastes of different
social classes and religions, and even color preferences for
designing labels. They discovered that in
several foreign countries, where ancestors were particularly
worshiped, hearing and possibly preserving
“the voice of some dead and gone patriarch of the family” was a
major selling point for the gramophone.
Columbia even developed a new diaphragm for the recordings
abroad. US artists, Burns argued, are
“trained, so that high notes are taken by gradation, and they are
familiar with the surroundings and
apparatus in the laboratory.” However, in the East, he found
“voices are explosive, and the diaphragm
‘blasts’,” which made a change in the equipment necessary to
better “absorb these sharp inequalities of
sound.”46 Based on the experiences with his customers abroad,
Burns established three categories of
records: (i) native or popular air or monologues, (ii) folk and
standard native songs, and (iii) high
culture and opera music in foreign languages. Many employees
of US gramophone companies traveled
abroad to gain first-hand experiences or familiarized themselves
with foreign music from the export
departments of their respective companies. Continuous travels
and learning by trial-and-error helped
the gramophone companies to develop more sophisticated
strategies for their export markets.
The Big Three in the US
In the meantime, the US market matured. The “big three”
(Columbia, Edison, and Berliner) were
locked in an intense commercial rivalry, aggravated by lawsuits
about patents and the system
competition between Edison’s cylinder and Berliner’s disc-
format (while Columbia dealt in both.)
Production figures (see Exhibit 5) reveal that from 1899 to
1901, the US industry went through a
slump due to intense rivalry, bitter recrimination and costly
litigation. In 1901, Emile Berliner withdrew
from his business due to this legal dispute and sold his patents
and rights to Eldridge Reeves Johnson,
an individual who made early contributor to the technological
and production side of the business, but
lacked significant experience in music. Johnson launched a new
company, the Victor Talking Machine
Company, in 1901 and signed a multipart commercial agreement
with the internationally successful
Gramophone Co., including a non-compete agreement and the
sharing of trademarks and research and
development. The industry was now a patent-based oligopoly
and the new big three (Columbia, Edison,
and Johnson) would keep a virtual stranglehold on the US
industry until 1921.
Fighting the prejudices against “canned” mechanical music, US
manufacturers established an
expensive star cult centered on high-class and high-culture
professional musicians. Male tenors were
particularly sought after because early sound recording
technology had problems capturing high-end
and low-end sounds. This not only led some bands to replace
drums with cowbells, but also meant that
female voices and high-pitched instruments, such as violins,
recorded rather poorly. Male tenors by
contrast could be captured particularly well. Gaisberg recorded
Fyodor Chaliapin and other members
of the Imperial Opera in Saint Petersburg as well as world-
famous tenor Enrico Caruso in Milan, whose
records were labeled with a red seal to mark the distinct
category. These records were also used by many
7
For the exclusive use of M. Hu, 2020.
This document is authorized for use only by Meiyi Hu in
International Business Strategy Winter Semester 2020 taught by
ERIC HUTCHINS, California State Polytechnic University -
Pomona
from Jan 2020 to May 2020.
https://partner.43
SCG-557 Gramophone: Reimagining Music
aspiring artists who could now practice their own playing based
on recordings of a well-established
performer. These Red Seal labels became popular in the high-
brow culture of the US and cemented
Victor’s position in the industry (see Exhibit 6 for sales
numbers.) Caruso and a few other superstar
artists received sizeable financial rewards for their efforts.
From mid-1915 to mid-1916, Caruso earned
more than $78,000 ($1.96 million in 2019 dollars 47) in
royalties from his recordings in the US.48
The marketing strategy that supported the focus on high-brow
music required continuous
investment. Victor spent $52.7 million49 on advertising from
1901 to 1929, averaging 8.24 percent of
the company’s annual expenditures, which made Victor one of
the most prodigious and best-known
advertisers in the world. In 1912 alone, the company allotted
more than $1.5 million 50 ($39.1 million
in 2019 dollars) for advertising. By the mid-1910s, Victor was
one of the top five magazine advertisers
in the US, although in terms of assets it ranked as only the
174th-largest company.51 Victor also invested
heavily in other promotional material, such as record and
phonograph catalogues as well as specialized
publications, such as the Victor Book of the Opera, a hardcover
book containing illustrated descriptions
of opera plots, translations of arias and integrated listings of
Victor opera records.52
The opera had a devoted following among the social elites but
was also, occasionally, of interest to
popular audiences, sometimes in adapted and modified forms.
Even in the immigrant communities in
large US cities, people enjoyed opera performances from their
home countries. In 1910, 14.7 percent of
the overall US population were foreign-born.53 In New York
City, a staggering 40.8 percent of the
population were first generation immigrants (compared to 18
percent in the 1970s and 37 percent in
2019). In other large cities, such as Boston (36 percent), Detroit
(33.5 percent), Chicago (28.7 percent)
and Philadelphia (25 percent), the immigrant population made
up a significant part of the
inhabitants.54 In the immigrant neighborhoods, one could even
find small dealers specializing in
records of a particular language group and refusing to carry
anything else.55
The Victor (and Gramophone Co.) trademark “His Master’s
Voice” became an iconic household
name. Starting in 1906, the campaign was showcased on a
heavily illuminated sign on Herald Square
in New York City above the legend “The Opera at Home.” In
this ad, Nipper, the dog, stood 25 feet high
and was seen by an estimated 800,000 people daily. The
advertisement was purportedly the most
expensive in the world at that time.56
What’s Next?
When World War I broke out on July 28, 1914, all experts in the
industry were stunned. This was
the first general war between the European powers since the
defeat of Napoleon in 1815. It ended a long
period of relative stability and great economic integration. Like
many observers, the gramophone
executives were taken by surprise at the suddenness of the war
crisis. The chairman of the Gramophone
Co. Trevor Williams noted: “When the war burst upon us … we,
with the rest of civilization, were quite
unprepared for such a contingency.”57 The shock of the war
caused panic among buyers. Consumers’
first reaction was to postpone the purchase of luxury and
entertainment goods, like records and
gramophones. A week after the war in Europe broke out, Alfred
Clark of the Gramophone Co. wrote to
Eldridge Johnson in the US: “There is no business, and it would
be foolish to attempt to do any.”58 The
nations at war included all of their colonies and dependent
territories in their war efforts. India, for
example, followed Great Britain and declared war on Germany
in September 1914.
A US trade journal observed that in the highly integrated world
economy, “[A]ll of the manufacturers
have European factories and branches, which will necessarily
suffer materially from the effects of the
war.” Shipping product from US factories to Europe was also
not an option because there was “no
demand for talking machines and records in Europe” and
“foreign shipping has practically ceased.”59
Debates began: Where should the industry turn now?
8
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Pomona
from Jan 2020 to May 2020.
https://inhabitants.54
https://foreign-born.53
https://records.52
https://company.51
Gramophone: Reimagining Music SCG-557
Exhibit 1: Frederick William Gaisberg (1 January 1873 – 2
September 1951)
Gaisberg (l) with Sir Edward Elgar and Yehudi Menuhin outside
the EMI Abbey Road studios after the
recording of Elgar's Violin Concerto in 1932.
Source: Wikipedia; Under Fair Use.
9
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from Jan 2020 to May 2020.
SCG-557 Gramophone: Reimagining Music
Exhibit 2: List of Names for the Talking Machine, 1877
10
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Gramophone: Reimagining Music SCG-557
Exhibit 2: List of Names for the Talking M achine, 1877,
continued
Auto-Electrograph = Electric Pen
Tel-autograph
Tel-autophone
Polyphone = Manifold Sounder
Autophone = Self sounder
Kosmophone = Universal Sounder
Acoustophone = Sound hearer = Audible
speaker
Octophone = Ear-sounder = speaker
Anitphone = Back-talker
Liguphone = Clear speaker
Minuttophone = Minute-sounder
Meistophone = Smallest sounder
Anchiphone = Near sounder or speaker
Palmatophone = Vibration sounder
Chronophone = Time-announcer = Speaking
clock
Didaskophone = Teaching speaker, Portable
teacher
Glottophone = Language sounder or
speaker
Climatophone = Weather announcer
Atmophone = Fog sounder or Vapor-
speaker
Palmophone = Pendulum sounder or
Sounding pendulum
Pinakophone = Sound Register
Hemerologophone = Speaking almanac
Kalendophone = Speaking Calendar
Sphygmophone = Pulse speaker
Halmophone = Heart-beat sounder
Seismophone = Earthquake sounder
Electrophone = Electric speaker
Brontophone = Thunder speaker
Klangophone = Bird-cry sounder
Surigmophone = Whistling sounder
Bremophone = Wind sounder
Bittakophone = Parrot speaker
Krogmophone = Croaking or Cawing
sounder
Hulagmophone = Barking sounder
Trematophone = Sound borer
Telephemist telephemy telepheme
Electrophemist electrophemy
electropheme
Phemegraph = speech writer
Omphegraph -gram = voice writer or
researcher
Melodograph Melograph Melpograph -
gram = song writer
Epograph = speech writer, lecture or
sermon
Rhetograph = speech writer
Kinemograph = motion writer
Atmophone = vapor or steam sound
Aerophone = air sound
Symphraxometer = pressure measurer
Synothemeter = pressure measurer
Orcheograph = vibration record
Orcheometer
Source: 1877 [Supplied year] -- Lists and Inventories/Cylinder
phonograph [D7702] Document File Series -- 1877: (D-77-02)
Edison, T.A. –
General [D7702ZEO; TAEM 14:242]. Courtesy of Thomas
Edison National Historical Park.
11
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SCG-557 Gramophone: Reimagining Music
Exhibit 3: Selected Excerpts from “The Phonograph and
Its Future” by Thomas Edison
Among the more important [applications for the phonograph]
may be mentioned: Letter-writing,
and other forms of dictation books, education, reader, music,
family record; and such electrotype
applications as books, musical-boxes, toys, clocks, advertising
and signaling apparatus, speeches, etc.,
etc.
Letter-writing: The apparatus now being perfected in
mechanical detail will be the standard
phonograph, and may be used for all purposes, except such as
require special form of matrix, such as
toys, clocks, etc., for an indefinite repetition of the same thing.
The main utility of the phonograph,
however, being for the purpose of letter writing and other forms
of dictation, the design is made with a
view to its utility for that purpose. … [I]t is desirable to have
but one class of machine throughout the
world.
…The practical application of this form of phonograph for
communications is very simple. A sheet
of foil is placed in the phonograph, the clock-work set in
motion, and the matter dictated into the
mouth-piece without other effort than when dictating to a
stenographer. It is then removed, placed in
a suitable form of envelope, and sent through the ordinary
channels to the correspondent for whom
designed. He, placing it upon his phonograph, starts his clock-
work and listens to what his
correspondent has to say. Inasmuch as it gives the tone of voice
of his correspondent, it is identified. As
it may be filed away as other letters, and at any subsequent time
reproduced, it is a perfect record. As
two sheets of foil have been indented with the same facility as a
single sheet, the “writer” may thus keep
a duplicate of his communication. As the principal of a business
house, or his partners now dictate the
important business communications to clerks, to be written out,
they are required to do no more by the
phonographic method, and do thereby dispense with the clerk,
and maintain perfect privacy in their
communications.
The phonograph letters may be dictated at home, or in the office
of a friend, the presence of a
stenographer not being required. The dictation may be as rapid
as the thoughts can be formed, or the
lips utter them. The recipient may listen to his letters being read
at a rate of from 150 to 200 words per
minute, and at the same time busy himself about other matters.
Injections, explanations, emphasis,
exclamations, etc., may be thrown into such letters, ad libitum.
In the early days of the phonograph, ere it has become
universally adopted, a correspondent in
Hong-Kong may possibly not be supplied with an apparatus,
thus necessitating a written letter of the
old-fashioned sort. In that case the writer would use his
phonograph simply as a dictating-machine, his
clerk writing it out from the phonograph at leisure, causing as
many words to be uttered at one time as
his memory was capable of retaining until he had written them
down. This clerk need not be a
stenographer, nor need he have been present when the letter was
dictated, etc.
The advantages of such an innovation upon the present slow,
tedious, and costly methods are too
numerous, and too readily suggest themselves, to warrant their
enumeration, while there are no
disadvantages which will not disappear coincident with the
general introduction of the new method.
Dictation: All kinds and manners of dictation which will permit
of the application of the mouth of
the speaker to the mouth-piece of the phonograph may be as
readily effected by the phonograph as in
the case of letters. … It would be even worth while to compel
witnesses in court to speak directly into
the phonograph, in order to thus obtain an unimpeachable record
of their testimony.
Source: T. A. Edison, 'The Phonograph and Its Future', North
American Review, 126, Jan/Jun (1878), 527-536.
12
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Gramophone: Reimagining Music SCG-557
Exhibit 4: Talking Machine Parlor
Source: Phonograph Arcade, Patrons Listening to Phonographs
Through Ear Tubes; undated, circa mid-1890s,
https://mediatedsignals.com/tag/cylinders/.
13
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https://mediatedsignals.com/tag/cylinders
Exhibit 6: Sales of the Victor Talking M achine Company,
1901-1913
SCG-557 Gramophone: Reimagining Music
Exhibit 5: US Production Figures for Edison and
Berliner/Johnson, 1893-1903
YEAR EDISON BERLINER/ EDISON BERLINER
MACHINE JOHNSON RECORDS RECORDS
MACHINE (CYLINDER) (DISCS)
27,000
100,000
248,652
713,753
569,154
255,784
256,908
1,696,296
1,966,036
MACHINES
1893-95 NA 1,000 NA
1896 1,239 NA NA
1897 5,167 12,420 87,690
1898 14,255 10,651 428,310
1899 46,097 14,348 1,886,137
1900 41,894 3,054 2,080,132
1901 41,381 7,570 1,976,645
1902 80,257 42,110 4,382,802
1903 113,151 46,601 7,663,142
Source: Martland, Recording History, p. 27.
YEAR RECORDS
1901-02
1902-03
1903-04
1904-05
1905-06
1906-07
1907-08
1908-09
1909-10
1910-11
1911-12
1912-13
Source: Martland, Recording History, p. 114.
256,908 42,110
1,696,296 40,601
1,966,036 47,074
2,595,011 65,591
3,565,679 82,589
7,051,775 107,432
5,248,147 50,732
4,639,463 68,231
5,988,004 94,666
6,205,929 124,927
9,150,374 206,798
11,086,489 251,909
14
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Gramophone: Reimagining Music SCG-557
1 Frederick William Gaisberg, The Music Goes Round (New
York: The Macmillan Company, 1942), 54.
2 Peter Martland, "Gaisberg, Frederick William (1873–1951),"
in Oxford Dictionary of National
Biography (Oxford: Oxford University Press, 2004).
3 Michael S. Kinnear, The Gramophone Company's First Indian
Recordings, 1899-1908 (Bombay:
Popular Prakashan, 1994).
4 Gaisberg, The Music Goes Round, 55.
5 A copy of this original Edison recording is available here:
https://www.youtube.com/watch?v=YBXyuY2J20o.
6 Thomas Edison National Historical Park, Lists and
Inventories, Cylinder phonograph, [D7702]
Document File Series -- 1877: (D-77-02) Edison, T.A. – General
[D7702ZEO; TAEM 14:242].
7 Daily Graphic, 2 April 1878. Quoted in: Sarah Knowles
Bolton, How Success Is Won (Boston: D.
Lothrop, 1885), 189.
8 Thomas A. Edison, "The Phonograph and Its Future," North
American Review 126, no. Jan/Jun
(1878).
9 Ibid., 527.
10 Ibid., 531.
11 Estimate obtained by multiplying $100 by the percentage
increase in the CPI from 1891 to 2017.
12 1910; video available here:
https://www.filmpreservation.org/preserved-films/screening-
room/the-
stenographer-s-friend-1910.
13 Gaisberg, The Music Goes Round, 5.
14 Richard James Burgess, The History of Music Production
(New York: Oxford University Press,
2014), 13-4.
15 H. Shanley Jones, “Will Replace Cheap Piano: This is the
Mission of the Talking Machine” Talking
Machine World vol. 1, no. 3 (March 1905), p. 9.
16 Quoted in: “Timely Talks on Timely Topics,” Talking
Machine World vol. 2, no. 2 (Feb. 1906), p. 11.
17 “Interior View of Douglas Phonograph Co.’s Handsome
Store,” Talking Machine World vol. 2, no. 2
(Feb. 1906), p. 15.
18 Ad by Herzog Art Furniture Co. in Talking Machine World,
vol. 1, no. 4 (April 1905), p. 8; “Trade
Notes from Cincinnati, O.,”, Talking Machine World vol. 2, no.
3 (April 1906), p. 5.
19 Note, in: Talking Machine World vol. 1, no. 1 (Jan. 1905), p.
15.
20 “Piano Dealer Gets Wise,” Talking Machine World vol. 2,
no. 3 (March 1905), p. 3.
21 John Philip Sousa, "The Menace of Mechanical Music,"
Appleton's Magazine 8, no. 3 (1906).
22 Alice Clark Cook, “Faults of Talking Machine as a Musical
Educator, Musical America, 5 August
1916, p. 31.
23 “Trade Notes from Cincinnati: An Interesting Chat with
Rudolf Wurlitzer Jr.,” Talking Machine
World, vol. 2, no. 3 (March 1906), p. 19.
24 “Hard to ‘Pick the Winner,’” Talking Machine World vol. 2
no. 4 [sic! incorrectly numbered 3]
(April 1906), p. 30.
25 Quoted in: Mark Katz, Capturing Sound: How Technology
Has Changed Music, Rev. ed. (Berkeley:
University of California Press, 2010), 59.
26 “Pittsburg’s Budget of News,” Talking Machine World vol.1,
no. 11 (Nov. 1905), p. 8.
27 Edward Lyman Bill, Talking Machine World, vol. 1, no. 5
(May 1905), p. 14.
28 Gaisberg, The Music Goes Round, 26.
29 Peter Martland, Since Records Began: Emi, the First 100
Years (London: Batsford, 1997), 44.
30 Jerrold Northrop Moore, A Voice in Time: The Gramophone
of Fred Gaisberg, 1873-1951 (London:
Hamilton, 1976).
31 Gaisberg, The Music Goes Round, 34.
32 Letter Hawd to Headquarter London, 21 Nov. 1901, EMI
Archives.
33 “India a Great Market,” Talking Machine World vol. 1, no. 4
(April 1905), p. 6.
34 Gaisberg, The Music Goes Round, 48-9.
15
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from Jan 2020 to May 2020.
https://www.filmpreservation.org/preserved-films/screening-
room/the
https://www.youtube.com/watch?v=YBXyuY2J20o
35
40
45
50
55
SCG-557 Gramophone: Reimagining Music
Diary entry 1 November 1902, made available:
http://www.recordingpioneers.com/docs/GAISBERG_DIARIES_
2.pdf.
36 Gerry Farrell, Indian Music and the West (Oxford, New
York: Oxford University Press, 1997), 117.
37 “Developing Our Export Trade,” Talking Machine World
vol. 4, no. 2 (Febr. 1908), p. 18. Quoted in:
Karl Hagstrom Miller, "Talking Machine World: Selling the
Local in the Global Music Industry, 1900-
1920," in Global History: Interactions between the Universal
and the Local, ed. A. G. Hopkins (New
York: Palgrave, 2006), 169.
38 Talking Machine World vol. 6, no. 12 (Dec. 1910), p. 49.
39 Letter London Headquarter to Addis, Calcutta, 6 December
1904, EMI Archives.
“India a Great Market,” Talking Machine World vol. 1, no. 4
(April 1905), p. 6.
41 Gaisberg, The Music Goes Round, 54.
42 Heinrich Bump “Unsere Reise um die Erde. Skizzen von der
großen „Beka“-Aufnahmen-
Expedition,” Phonographische Zeitschrift 7/28, 1906: 582-602,
here: 583-4.
43 Letter Rodkinson, Kolkata to London Headquarter, Dec. 18,
1906, EMI Archives; “Trade News from
All Points of the Compass,” Talking Machine World vol. 3, no.
3 (March 1907), p. 37.
44 Letter Kolkata to London Headquarter, June 28, 1906, EMI
Archives.
Letter London Headquarter to Rodkinson, Kolkata, Nov. 28,
1906, EMI Archives.
46 Talking Machine World vol. 4, no. 2 (Febr. 1908), pp. 18-20.
47 Estimate based on change in consumer price index, see
endnote 11.
48 David Suisman, Selling Sounds: The Commercial Revolution
in American Music (Cambridge,
Mass.: Harvard University Press, 2009), 130.
49 Between $754 million and $1.5 billion in today’s-$; estimate
based on change in consumer price
index, see endnote 11.
Estimate based on change in consumer price index, see endnote
11.
51 Number for 1917. Suisman, Selling, 114.
52 Ibid., 117. For an example, see
http://www.loc.gov/jukebox/victor-book-of-the-opera.
53 Campbell J. Gibson and Emily Lennon, “Historical Census
Statistics on the Foreign-Born
Population of the United States: 1850 TO 1990,” US Bureau of
the Census, Population Division
Working Paper No. 29, Febr. 1999,
https://www.census.gov/population/www/documentation/twps00
29/twps0029.html.
54 https://www1.nyc.gov/assets/planning/download/pdf/data-
maps/nyc-
population/nny2013/chapter2.pdf
“Saturday Night Closing Proves Success in Detroit,” Talking
Machine World vol. 9, no. 12 (Dec.
1913), p. 54.
56 Suisman, Selling, 118, 20.
57 Peter Martland, Recording History: The British Record
Industry, 1888-1931 (Lanham, Md.:
Scarecrow Press, 2013), 199.
58 Ibid., 200.
59 “New York Trade Discusses European War,” Talking
Machine World vol. 10, no. 8 (Aug. 1914), p.
24.
16
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Pomona
from Jan 2020 to May 2020.
https://www1.nyc.gov/assets/planning/download/pdf/data-
maps/nyc
https://www.census.gov/population/www/documentation/twps00
29/twps0029.html
http://www.loc.gov/jukebox/victor-book-of-the-opera
http://www.recordingpioneers.com/docs/GAISBERG_DIARIES_
2.pdf
S C G - 5 5 7
N o v e m b e r 5 , 2 0 1 9
C H R I S T I N A L U B I N S K I
Historical Entrepreneurship Case Series
Gramophone: Reimagining Music
We entered a new world of musical and artistic values. One had
to erase all
memories of the music of European opera-houses and concert-
halls: the very
foundations of my musical training were undermined.1
--Fred Gaisberg on his experience of recording in India, 1902
T he professional talent scout Fred Gaisberg (see Exhibit 1 for
picture) found himself at a loss. He had arrived in Calcutta
(Kolkata) at the end of October 1902, to record local artists
whose music could be sold on gramophone discs. This was not
the first scouting trip for the 29-year
old. Gaisberg had worked for his employer, the Anglo-American
Gramophone Co., since 1898 and had
crisscrossed Europe to detect artistic talents—with enormous
success. He proudly reflected on his
sessions with the famous tenor Enrico Caruso in
Milan, only six short months ago. These recordings not
only enhanced Gaisberg's own reputation but also
established the gramophone as an important means
for spreading art and culture to the masses.2
However, in India, Gaisberg encountered new
challenges. The first musicians he recorded were found
with the help of two Indian intermediaries from the
local theater scene. 3 Yet, Gaisberg had his doubts
about the music he heard. Observing one performance
at an Indian theater, he noticed:
Quite arbitrarily, there was introduced a chorus of young
Nautch girls [female
Indian performers] […] accompanied by fourteen brass
instruments all playing in
unison. I had yet to learn that the oriental ear was
unappreciative of chords and
harmonic treatment and only demanded the rhythmic beat of the
accompaniment
of the drums. At this point we left.4
On the way home, Gaisberg pondered: How was he going to
recognize the most promising Indian
performers if their music was so hard to understand? How
would he ever be able to convince his
customers that the gramophone should be considered as a
serious musical instrument? And would
anyone even like the songs that he was about to preserve for all
eternity?
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Pomona
from Jan 2020 to May 2020.
SCG-557 Gramophone: Reimagining Music
The Origins of the Gramophone Business
The gramophone was a remarkable invention. It was conceived
by the serial inventor Thomas
Edison, who, in 1877, discovered a way to record sound on
tinfoil-coated cylinders. Edison tested the
machine by speaking the nursery rhyme “Mary Had a Little
Lamb” into the mouthpiece, and was
delighted as the machine played his words back to him.5 In his
laboratory notebook, he casually jotted
down the name “phonograph” for the machine. However, as it
turned out, the term phonograph was
commonly used as a synonym for “shorthand;” a method of
rapid writing with abbreviations and
symbols when dictating. Edison and his staff brainstormed
alternatives: Should they call the machine
Polyphone (manifold sounder)? Cosmophone (universal
sounder) or Antiphone (back-talker)? Maybe
Chronophone (time-announcer) or Omphlegraph (voice writer)?
(For a full list of the names
considered, see Exhibit 2 6) In the end, the alternatives were
unsatisfactory and Edison received a
patent for his “Phonograph or Speaking Machine” on February
19, 1878. Competitors, notably
Alexander Graham Bell and Emile Berliner, who further
developed the technology of sound
reproduction, distinguished their products from Edison’s by
using alternative names, such as
“gramophone,” “graphophone,” and “talking machine.”
Like any good entrepreneur, Edison had great plans for his
invention and immediately thought
about commercialization. He opined, “I have invented a great
many machines, but this is my baby, and
I expect it to grow up and support me in my old age.”7 As early
as January 1878, he licensed his
technology to The Edison Speaking Phonograph Company,
which exploited the new machine by
exhibiting it. Edison himself received $10,000 for the
manufacturing and sales rights and 20% of the
profits. However, the machine remained difficult to operate and
the recordings etched on tin-foil could
only play about two minutes of audio and were ruined after a
few uses. Moreover, exhibiting the
machine was not going to generate a constant stream of income.
What if the novelty wore off?
Eager to make his invention a long-term commercial success,
Edison sat down and speculated about
other lucrative applications.8 He explained that the talking
machine “brings its possibilities within the
range of the speculative imaginations” but also admitted to
being “in a somewhat chaotic condition of
mind as to where to draw the dividing line.”9 Working through
the mental turmoil, Edison presented a
list of the twelve most promising applications for his invention:
1. Letter writing and other forms of dictation
2. Books [i.e. reading of existing books]
3. Educational Purposes
4. Music
5. Family Record
6. Phonographic Books [i.e. newly designed for recordings and
to preserve languages]
Christina Lubinski, Professor of Clinical Entrepreneurship at
the University of Southern California, prepared this case. This
case in the Historical Entrepreneurship Case Series was
supported by a grant from the Founder Central Initiative. This
case
was developed from field and archival research. Cases are
developed solely as the basis for class discussion and are not
intended to serve as endorsements, sources of primary data or
illustrations of effective or ineffective management.
Copyright © 2019 Lloyd Greif Center for Entrepreneurial
Studies, Marshall School of Business, University of Southern
California. For information about Greif Center cases, please
contact us at [email protected] This publication may
not be digitized, photocopied, or otherwise reproduced, posted
or transmitted without the permission of The Lloyd Greif
Center for Entrepreneurial Studies.
2
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Pomona
from Jan 2020 to May 2020.
mailto:[email protected]
Gramophone: Reimagining Music SCG-557
7. Musical boxes
8. Toys
9. Clocks
10. Advertising
11. Speech and other Utterances
12. Revolutionize the systems of telephone and telegraphy
Edison saw by far the greatest potential in the field of office
dictations and “the design [of the
machine] is made with a view to its utility for that purpose.”10
He reasoned that the phonograph would
allow businessmen to dictate from anywhere, keep duplicates as
needed, eliminate many of their clerk
positions, and improve the privacy of business correspondence
(see Exhibit 3 for his own words on
the matter). Eventually, he predicted, stenographers would be
disposable altogether, when
phonographs became so prevalent that businessmen could send
each other cylinders with recordings
rather than letters. In addition, one may argue that the corporate
customers Edison targeted were less
likely to shy away from the steep price of the machine ($150 in
1891; approx. $2,780 today.)11
However, it took almost a decade before businessman Jesse H.
Lippincott purchased the Edison
Phonograph Company as well as technology licenses from some
of the other competitors in the
industry. By 1888, phonographs were leased as office dictating
machines to various companies.
However, financial success eluded the entrepreneurial venture.
Moreover, not everybody celebrated the
arrival of this new technology. The first National Phonograph
Association Convention in 1890
addressed the pressing problem of how to overcome opposition
from stenographers, who feared that
the machine would devalue their skills and bring unemployment
(the film The Stenographer’s Friend;
or, What Was Accomplished by an Edison Business
Phonograph? addressed some of the widely shared
concerns12). When Lippincott fell ill, Edison, as the main
creditor of the business, tried to continue it
but eventually had to declare bankruptcy.
From Office to Opera
As the dictation business failed, Edison and other pioneering
entrepreneurs moved into the
entertainment space. Besides Edison’s new company, the
“National Phonograph Company,” his main
competitors were Edward Easton’s “Columbia Phonograph
Company” (founded in 1887) and Emile
Berliner’s “United States Gramophone Company” (founded in
1894). While Edison recorded sounds on
wax cylinders, Emile Berliner invented the first discs made
initially of hard rubber and later shellac.
Consumers had to decide for either the cylinder or the disc
system, with neither having a strong
competitive advantage. Recordings made on cylinder could not
be played on disc machines, and vice
versa.
The first move into the entertainment space was the opening of
talking machine parlors (see
Exhibit 4) in the 1890s, where customers could listen to a
recording in exchange for a nickel. Gaisberg
mockingly described these penny arcades: “It was ludicrous in
the extreme to see ten people grouped
about a phonograph, each with a tube leading from his ears,
grinning and laughing at what he heard.”13
It was not surprising that Gaisberg rejected the unsophisticated
musical entertainment of the
parlors. Growing up in Washington DC, Gaisberg was a born
musician. As a young child, he sang in the
choir of famous composer and conductor John Philipp Sousa. He
also spent years perfecting his piano
play. At age sixteen, still in high school, he worked part-time
for the Columbia Phonograph Company
on recordings of the whistler John York Atlee, who he also
accompanied on the piano. When Gaisberg
graduated in 1891, he trained with Columbia and became a full-
time producer. In 1894, he met Emile
3
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International Business Strategy Winter Semester 2020 taught by
ERIC HUTCHINS, California State Polytechnic University -
Pomona
from Jan 2020 to May 2020.
SCG-557 Gramophone: Reimagining Music
Berliner, the inventor of the disc, and started working for him.
His tasks included scouting for talent,
playing accompaniments, and washing up the acid tanks.14 He
learned the business inside and out.
The accomplished musician Gaisberg was not alone in objecting
to the “nickel-in-the-slot”
machines. The trade journal Talking Machine World reported in
1905, “One of the main obstacles to
the introduction of the graphophone into many homes is, no
doubt, the popular impression that the
talking machine in still only a scientific toy.”15 The penny
arcades were fine to earn a few nickels but
they cashed in on the novelty of the technology and the
curiosity and amazement of the customers. The
burning question, however, was how to generate a consistent
stream of income.
The answer of the US manufacturers was to go after “high-
cultured” customers, who they assumed
could learn to appreciate the gramophone not for its novelty but
for its ability to bring artful music to
their living rooms. Repositioning the gramophone as a serious
musical instrument was not an easy task.
Manufacturers and dealers started by defining the piano and the
violin as the gramophone’s left and
right competitors. C. V. Henkel of the Douglas Phonograph Co.
stressed the “absolute perfection in
sound reproduction” and asked pointedly: “Can you name any
musical instrument that can compare
with the incomparable talking machine?”16 Stores received a
make-over to resemble the most elegant
piano showrooms,17 and furniture makers designed beautiful
high-class cabinets for the gramophones
to fit them into the living rooms of the upper classes.18 When
well-respected piano dealers, such as
Barnett, Samuel & Sons, added talking machine departments to
their stores, the industry breathed a
little easier.19 A trade journal reported, not without pride,
about one piano dealer who admitted that he
used to consider talking machines “beneath my dignity” but now
saw them as “cultivating a latent love
for music among the masses, which in time will create a demand
for musical instruments of every
description.”20
Unfortunately for the industry, critics of the gramophone were
also numerous and vocal. Some
criticized the poor quality of the recordings or the fact that both
Edison’s cylinders and Berliner’s discs
could only play two to three minutes of audio, while musical
live performances at the time often lasted
for hours. Indeed, professional producers, like Gaisberg, had to
cut up longer performances and even
reduced the lengths of a song to fit the new medium. Some
artists objected to the fact that the recordings
eliminated the important interaction between the performer and
the audience, and isolated the music
lover who now enjoyed the music alone, rather than in the
company of family and friends.
Others feared for the effect of the gramophone on American
culture. John Philip Sousa, Gaisberg’s
early teacher, ranted against the gramophones, which “sing for
us a song or play for us a piano, in
substitute for human skill, intelligence, and soul.” He foresaw
“a marked deterioration in American
music and musical taste, an interruption in the musical
development of the country, and a host of other
injuries to music in its artistic manifestation, by virtue—or
rather by vice—of the multiplication of the
various music-reproducing machines.”21 Alice Clark Cook, a
writer for the classical music magazine
Musical America, vexed: “As a diet of canned foods […] injures
taste and digestion, so does a diet of
‘canned’ music lead to the destruction of individual taste, to
indifference and loss of appetite.”22
To counter such claims, manufacturers moved even more
decidedly into the field of “serious” artful
music (e.g., classical music and opera) and engaged in
marketing campaigns highlighting the
gramophone’s role in promoting the arts, not destroying them.
Manufacturers also invested in
specialized education departments to stress the gramophone’s
use as an educational tool for the
promotion of classical music in schools and universities.
Rudolph Wurlitzer Jr. of the eponymous
company argued that the talking machine “offers to persons who
have neither means to attend concerts
of good music, nor ability to play upon an instrument, the
opportunity to become familiarized with
high-class selections and the personal interpretations of the best
instrumental and vocal artists.”23
4
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Gramophone: Reimagining Music SCG-557
Similarly, John Prescott of the American Record Co. expressed
his belief that “the talking machine is
becoming more and more an important factor in educating the
public taste.”24
By the beginning of the twentieth century, the talking machine
was inextricably intertwined with
education and high culture. A journalist of National Music
Monthly argued that opera had increased in
popularity because of the influence of the gramophone: “People
have heard in their own homes
beautiful excerpts from the greatest operas, and have come to
know their meaning.”25 An observer in
Pittsburg found that, “The talking machine in its earlier stage
was regarded more or less as a toy and
people of culture and refinement refused to buy them. […]
[T]hese objections have been swept aside
and as a result we see among the buyers […] some of the best
and most cultured people of the city.”26
Edward Lyman Bill, the editor of Talking Machine World, even
made a claim to the gramophone’s
ability to bring culture to the entire world: “Every nation should
strive to cultivate the art instinct […]
it is through the talking machine that millions of people in all
lands are enabled to hear the music of
the world’s greatest artists.”27
Into the Unknown
Inspired by such missionary zeal, it is not surprising that an
ever-growing number of gramophone
manufacturers competed not just in the US but also in foreign
markets. Fred Gaisberg’s employer, the
Gramophone Co., was early in targeting foreign markets all
around the world. The company was
founded in 1898 in London, England, on behalf of Emile
Berliner. That same year, Gaisberg moved
from the US to London to set up the first recording studio in
Europe and started his long and successful
career as a record producer. Shortly thereafter, in November
1899, the Gramophone Co. acquired the
famous trademark “His Master’s Voice,” displaying the fox
terrier Nipper listening to a gramophone.
Gaisberg went on a series of recording tours to expand the
portfolio of the Gramophone Company.
He started with a European tour covering Leipzig, Vienna,
Budapest, Milan, Paris and Madrid in the
summer of 1899. Gaisberg remembered: “This expedition gave
me vast experience in recording under
various conditions and produced a rich harvest of musical
records, both exciting and delightful to my
provincial mind.” 28 The results were so promising that
Gaisberg’s manager sent him almost
immediately on a second tour across the British Isles with his
companion William Sinkler Darby. The
two young engineers were regarded as elite employees with
special skills. Within the company, they
were known as “the experts” or “the boys,” partly because of
their young age and partly because of their
pleasure-seeking lifestyle during travels.29 In February 1900,
Gaisberg embarked upon a major Russia
tour, where he recorded for a full six months.30 “I had seen
opera performances on a scale unbelievably
lavish,” Gaisberg noted after the trip. “I had heard and
negotiated with a bevy of the greatest and
perhaps most spoiled artists of that epoch.”31
Another opportunity awaited them: India. In India, English and
Indian musical instrument dealers
began to see talking machines emerge as a high potential line of
business, although they struggled with
adequately serving a market that was spread out over such a
vast territory. In July 1901, Gramophone
Co. sent his agent, John Watson Hawd, to Calcutta to
investigate the emerging opportunity. Hawd
traveled widely in India and concluded: “I think we shall do a
fair business here if we only have the
goods, but until we get native records we shall only be able to
sell to Europeans and they are only 1 per
100 natives.”32 Being on the ground, it became clear to Hawd
that the recordings made in Europe and
the US would not sell in India. Other traveling agents and
scouts confirmed that “American records are
absolutely unknown” and “[o]rchestral records are also little in
demand.”33
Moreover, the many different languages and dialects spoken in
India and the religious diversity
made this a challenging music market. Different groups of
people wanted different music. Hawd was
relentless in telling his superiors: “You must however send one
man to make records.” Not surprisingly,
5
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Pomona
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SCG-557 Gramophone: Reimagining Music
the Gramophone Co. selected Fred Gaisberg, their most
experienced scout. He was accompanied by his
19-year-old assistant George Dillnutt, the businessman Thomas
Dowe Addis and Addis’ wife. According
to Gaisberg, the aim of this trip was “to open up new markets,
establish agencies, and acquire a
catalogue of native records. [...] As we steamed down the
channel into the unknown I felt like Marco
Polo starting out on his journeys.”34
However, making local recordings proved more difficult than
anyone had anticipated. Upon arrival
in Calcutta, Gaisberg first struggled to get his luggage with the
recording equipment cleared at customs.
After a total of five days of waiting, he declared happily:
“Today we at last succeeded in getting our stuff
out of the Custom House.”35 It took another week before they
had identified the first artists and
Gaisberg noted that the first recordings made on November 8,
were of two nautch girls “with miserable
voices.”36 The accomplished piano player Gaisberg had a hard
time making sense of the Indian music.
A perfectionist, Gaisberg wanted all recordings to be flawless
because unlike live performances, they
were supposed to last. However, it was difficult for him to
evaluate the Indian performances. Edward
Burns, manager of the Columbia export department, confirmed
that the talent scouts traveling around
were generally “strangers in the countries to which they may be
despatched [sic], knowing little, if
anything, of the language and customs of the people and
ignorant of the material from which to choose
suitable recording-making talent.”37
The result was a hodgepodge of questionable material. After
their first six-week stay, Gaisberg and
his crew went home with over 500 masters, of which records
were manufactured in Europe and shipped
to India in April 1903. Other companies followed their example
and recorded local artists all over the
Indian subcontinent. In lieu of any deeper understanding of the
music, they relied on easily observables
proxies, most importantly language variety. Recording
engineers sent detailed reports on the different
dialects and languages spoken in all parts of the world.38 The
Gramophone Co. instructed its local agent
in India to extend the catalogue by 2,500 records in order to
cover the twelve languages that were
considered most popular.39 The lack of instructions towards
musical genre or style mirrors the failure
to understand the local music; however, the decision to provide
music in a variety of languages was a
first step toward diversifying the portfolio.
Unexpectedly for many of the scouts, quite a few of these
Indian recordings turned out to be very
successful. “To be sure the selections are weird,” argued one
recording engineer about his activities in
India, “but they sell like hot cakes.” Following a market rather
than an art logic, this recording engineer
was optimistic about the future: “It may appear queer, but India
is the best place on earth for talking
machines. The masters must be made on the spot, and be native
music … but India … appears to me a
great field for American enterprise in this line.”40
Reliable local middlemen could have been extremely valuable in
this context, but they were also rare
and highly sought after in the competitive Indian market.
Gaisberg first turned to the English agents
living in India but was disappointed: “They could be living on
another planet for all the interest they
took in Indian music.”41 A German competitor, Beka Records,
attempted to collaborate with locals in
Calcutta. Heinrich Bump, owner of the company and lead
recording scout, asked a partner in Bombay
to introduce him to a friend in Calcutta. However, that friend
was unable to accommodate them and
instead referred them to a pal, who again passed their wishes on
to another associate. The latter was
supposed to engage the right artists and attend the recording
sessions to guarantee that performers
sing the right pieces in the pre-selected languages. However, the
lengthy negotiations between the
partners yielded few results, and eventually Bump felt that he
was being taken advantage of.42
Both the Gramophone Co. and Beka worked with an Indian
trading company, Valabhdas Lakhmidas
and Co. with great experience in record sales. Because their
services were so valuable, Beka offered
Valabhdas favorable contract conditions, sending large
quantities of goods on consignment and
6
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This document is authorized for use only by Meiyi Hu in
International Business Strategy Winter Semester 2020 taught by
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Pomona
from Jan 2020 to May 2020.
https://popular.39
https://world.38
Gramophone: Reimagining Music SCG-557
imposing no minimum sales. Gramophone Co. feared that this
practice put them at a disadvantage to
Beka, and the Germans indeed managed to complete 1,000
Indian records with the help of their local
partner.43 Eventually, Valabhdas and Beka entered an exclusive
agreement. In addition to the musical
artists that Valabhdas selected, they also recorded political
speeches and patriotic songs, which became
very popular in the context of an anti-colonial protest movement
in 1906. Gramophone Co. considered
the competition inferior: “The ‘Beka’ Records (Native) are . . .
poor stuff. No class whatever, and not to
be compared with our Records.”44 However, they sold well and
Gramophone Co. debated the option of
reissuing records that had been withdrawn from the catalogue at
a cheaper price “as a measure for the
destruction of the Beka Agency.”45
Over time, the internationalization departments became better at
identifying characteristics of
foreign music outside of language. Edward Burns of the
Columbia export department stressed how he
and his colleagues studied migration patterns of different ethnic
groups, the musical tastes of different
social classes and religions, and even color preferences for
designing labels. They discovered that in
several foreign countries, where ancestors were particularly
worshiped, hearing and possibly preserving
“the voice of some dead and gone patriarch of the family” was a
major selling point for the gramophone.
Columbia even developed a new diaphragm for the recordings
abroad. US artists, Burns argued, are
“trained, so that high notes are taken by gradation, and they are
familiar with the surroundings and
apparatus in the laboratory.” However, in the East, he found
“voices are explosive, and the diaphragm
‘blasts’,” which made a change in the equipment necessary to
better “absorb these sharp inequalities of
sound.”46 Based on the experiences with his customers abroad,
Burns established three categories of
records: (i) native or popular air or monologues, (ii) folk and
standard native songs, and (iii) high
culture and opera music in foreign languages. Many employees
of US gramophone companies traveled
abroad to gain first-hand experiences or familiarized themselves
with foreign music from the export
departments of their respective companies. Continuous travels
and learning by trial-and-error helped
the gramophone companies to develop more sophisticated
strategies for their export markets.
The Big Three in the US
In the meantime, the US market matured. The “big three”
(Columbia, Edison, and Berliner) were
locked in an intense commercial rivalry, aggravated by lawsuits
about patents and the system
competition between Edison’s cylinder and Berliner’s disc-
format (while Columbia dealt in both.)
Production figures (see Exhibit 5) reveal that from 1899 to
1901, the US industry went through a
slump due to intense rivalry, bitter recrimination and costly
litigation. In 1901, Emile Berliner withdrew
from his business due to this legal dispute and sold his patents
and rights to Eldridge Reeves Johnson,
an individual who made early contributor to the technological
and production side of the business, but
lacked significant experience in music. Johnson launched a new
company, the Victor Talking Machine
Company, in 1901 and signed a multipart commercial agreement
with the internationally successful
Gramophone Co., including a non-compete agreement and the
sharing of trademarks and research and
development. The industry was now a patent-based oligopoly
and the new big three (Columbia, Edison,
and Johnson) would keep a virtual stranglehold on the US
industry until 1921.
Fighting the prejudices against “canned” mechanical music, US
manufacturers established an
expensive star cult centered on high-class and high-culture
professional musicians. Male tenors were
particularly sought after because early sound recording
technology had problems capturing high-end
and low-end sounds. This not only led some bands to replace
drums with cowbells, but also meant that
female voices and high-pitched instruments, such as violins,
recorded rather poorly. Male tenors by
contrast could be captured particularly well. Gaisberg recorded
Fyodor Chaliapin and other members
of the Imperial Opera in Saint Petersburg as well as world-
famous tenor Enrico Caruso in Milan, whose
records were labeled with a red seal to mark the distinct
category. These records were also used by many
7
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Pomona
from Jan 2020 to May 2020.
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SCG-557 Gramophone: Reimagining Music
aspiring artists who could now practice their own playing based
on recordings of a well-established
performer. These Red Seal labels became popular in the high-
brow culture of the US and cemented
Victor’s position in the industry (see Exhibit 6 for sales
numbers.) Caruso and a few other superstar
artists received sizeable financial rewards for their efforts.
From mid-1915 to mid-1916, Caruso earned
more than $78,000 ($1.96 million in 2019 dollars 47) in
royalties from his recordings in the US.48
The marketing strategy that supported the focus on high-brow
music required continuous
investment. Victor spent $52.7 million49 on advertising from
1901 to 1929, averaging 8.24 percent of
the company’s annual expenditures, which made Victor one of
the most prodigious and best-known
advertisers in the world. In 1912 alone, the company allotted
more than $1.5 million 50 ($39.1 million
in 2019 dollars) for advertising. By the mid-1910s, Victor was
one of the top five magazine advertisers
in the US, although in terms of assets it ranked as only the
174th-largest company.51 Victor also invested
heavily in other promotional material, such as record and
phonograph catalogues as well as specialized
publications, such as the Victor Book of the Opera, a hardcover
book containing illustrated descriptions
of opera plots, translations of arias and integrated listings of
Victor opera records.52
The opera had a devoted following among the social elites but
was also, occasionally, of interest to
popular audiences, sometimes in adapted and modified forms.
Even in the immigrant communities in
large US cities, people enjoyed opera performances from their
home countries. In 1910, 14.7 percent of
the overall US population were foreign-born.53 In New York
City, a staggering 40.8 percent of the
population were first generation immigrants (compared to 18
percent in the 1970s and 37 percent in
2019). In other large cities, such as Boston (36 percent), Detroit
(33.5 percent), Chicago (28.7 percent)
and Philadelphia (25 percent), the immigrant population made
up a significant part of the
inhabitants.54 In the immigrant neighborhoods, one could even
find small dealers specializing in
records of a particular language group and refusing to carry
anything else.55
The Victor (and Gramophone Co.) trademark “His Master’s
Voice” became an iconic household
name. Starting in 1906, the campaign was showcased on a
heavily illuminated sign on Herald Square
in New York City above the legend “The Opera at Home.” In
this ad, Nipper, the dog, stood 25 feet high
and was seen by an estimated 800,000 people daily. The
advertisement was purportedly the most
expensive in the world at that time.56
What’s Next?
When World War I broke out on July 28, 1914, all experts in the
industry were stunned. This was
the first general war between the European powers since the
defeat of Napoleon in 1815. It ended a long
period of relative stability and great economic integration. Like
many observers, the gramophone
executives were taken by surprise at the suddenness of the war
crisis. The chairman of the Gramophone
Co. Trevor Williams noted: “When the war burst upon us … we,
with the rest of civilization, were quite
unprepared for such a contingency.”57 The shock of the war
caused panic among buyers. Consumers’
first reaction was to postpone the purchase of luxury and
entertainment goods, like records and
gramophones. A week after the war in Europe broke out, Alfred
Clark of the Gramophone Co. wrote to
Eldridge Johnson in the US: “There is no business, and it would
be foolish to attempt to do any.”58 The
nations at war included all of their colonies and dependent
territories in their war efforts. India, for
example, followed Great Britain and declared war on Germany
in September 1914.
A US trade journal observed that in the highly integrated world
economy, “[A]ll of the manufacturers
have European factories and branches, which will necessarily
suffer materially from the effects of the
war.” Shipping product from US factories to Europe was also
not an option because there was “no
demand for talking machines and records in Europe” and
“foreign shipping has practically ceased.”59
Debates began: Where should the industry turn now?
8
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Pomona
from Jan 2020 to May 2020.
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Gramophone: Reimagining Music SCG-557
Exhibit 1: Frederick William Gaisberg (1 January 1873 – 2
September 1951)
Gaisberg (l) with Sir Edward Elgar and Yehudi Menuhin outside
the EMI Abbey Road studios after the
recording of Elgar's Violin Concerto in 1932.
Source: Wikipedia; Under Fair Use.
9
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International Business Strategy Winter Semester 2020 taught by
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Pomona
from Jan 2020 to May 2020.
SCG-557 Gramophone: Reimagining Music
Exhibit 2: List of Names for the Talking Machine, 1877
10
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from Jan 2020 to May 2020.
Gramophone: Reimagining Music SCG-557
Exhibit 2: List of Names for the Talking M achine, 1877,
continued
Auto-Electrograph = Electric Pen
Tel-autograph
Tel-autophone
Polyphone = Manifold Sounder
Autophone = Self sounder
Kosmophone = Universal Sounder
Acoustophone = Sound hearer = Audible
speaker
Octophone = Ear-sounder = speaker
Anitphone = Back-talker
Liguphone = Clear speaker
Minuttophone = Minute-sounder
Meistophone = Smallest sounder
Anchiphone = Near sounder or speaker
Palmatophone = Vibration sounder
Chronophone = Time-announcer = Speaking
clock
Didaskophone = Teaching speaker, Portable
teacher
Glottophone = Language sounder or
speaker
Climatophone = Weather announcer
Atmophone = Fog sounder or Vapor-
speaker
Palmophone = Pendulum sounder or
Sounding pendulum
Pinakophone = Sound Register
Hemerologophone = Speaking almanac
Kalendophone = Speaking Calendar
Sphygmophone = Pulse speaker
Halmophone = Heart-beat sounder
Seismophone = Earthquake sounder
Electrophone = Electric speaker
Brontophone = Thunder speaker
Klangophone = Bird-cry sounder
Surigmophone = Whistling sounder
Bremophone = Wind sounder
Bittakophone = Parrot speaker
Krogmophone = Croaking or Cawing
sounder
Hulagmophone = Barking sounder
Trematophone = Sound borer
Telephemist telephemy telepheme
Electrophemist electrophemy
electropheme
Phemegraph = speech writer
Omphegraph -gram = voice writer or
researcher
Melodograph Melograph Melpograph -
gram = song writer
Epograph = speech writer, lecture or
sermon
Rhetograph = speech writer
Kinemograph = motion writer
Atmophone = vapor or steam sound
Aerophone = air sound
Symphraxometer = pressure measurer
Synothemeter = pressure measurer
Orcheograph = vibration record
Orcheometer
Source: 1877 [Supplied year] -- Lists and Inventories/Cylinder
phonograph [D7702] Document File Series -- 1877: (D-77-02)
Edison, T.A. –
General [D7702ZEO; TAEM 14:242]. Courtesy of Thomas
Edison National Historical Park.
11
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SCG-557 Gramophone: Reimagining Music
Exhibit 3: Selected Excerpts from “The Phonograph and
Its Future” by Thomas Edison
Among the more important [applications for the phonograph]
may be mentioned: Letter-writing,
and other forms of dictation books, education, reader, music,
family record; and such electrotype
applications as books, musical-boxes, toys, clocks, advertising
and signaling apparatus, speeches, etc.,
etc.
Letter-writing: The apparatus now being perfected in
mechanical detail will be the standard
phonograph, and may be used for all purposes, except such as
require special form of matrix, such as
toys, clocks, etc., for an indefinite repetition of the same thing.
The main utility of the phonograph,
however, being for the purpose of letter writing and other forms
of dictation, the design is made with a
view to its utility for that purpose. … [I]t is desirable to have
but one class of machine throughout the
world.
…The practical application of this form of phonograph for
communications is very simple. A sheet
of foil is placed in the phonograph, the clock-work set in
motion, and the matter dictated into the
mouth-piece without other effort than when dictating to a
stenographer. It is then removed, placed in
a suitable form of envelope, and sent through the ordinary
channels to the correspondent for whom
designed. He, placing it upon his phonograph, starts his clock-
work and listens to what his
correspondent has to say. Inasmuch as it gives the tone of voice
of his correspondent, it is identified. As
it may be filed away as other letters, and at any subsequent time
reproduced, it is a perfect record. As
two sheets of foil have been indented with the same facility as a
single sheet, the “writer” may thus keep
a duplicate of his communication. As the principal of a business
house, or his partners now dictate the
important business communications to clerks, to be written out,
they are required to do no more by the
phonographic method, and do thereby dispense with the clerk,
and maintain perfect privacy in their
communications.
The phonograph letters may be dictated at home, or in the office
of a friend, the presence of a
stenographer not being required. The dictation may be as rapid
as the thoughts can be formed, or the
lips utter them. The recipient may listen to his letters being read
at a rate of from 150 to 200 words per
minute, and at the same time busy himself about other matters.
Injections, explanations, emphasis,
exclamations, etc., may be thrown into such letters, ad libitum.
In the early days of the phonograph, ere it has become
universally adopted, a correspondent in
Hong-Kong may possibly not be supplied with an apparatus,
thus necessitating a written letter of the
old-fashioned sort. In that case the writer would use his
phonograph simply as a dictating-machine, his
clerk writing it out from the phonograph at leisure, causing as
many words to be uttered at one time as
his memory was capable of retaining until he had written them
down. This clerk need not be a
stenographer, nor need he have been present when the letter was
dictated, etc.
The advantages of such an innovation upon the present slow,
tedious, and costly methods are too
numerous, and too readily suggest themselves, to warrant their
enumeration, while there are no
disadvantages which will not disappear coincident with the
general introduction of the new method.
Dictation: All kinds and manners of dictation which will permit
of the application of the mouth of
the speaker to the mouth-piece of the phonograph may be as
readily effected by the phonograph as in
the case of letters. … It would be even worth while to compel
witnesses in court to speak directly into
the phonograph, in order to thus obtain an unimpeachable record
of their testimony.
Source: T. A. Edison, 'The Phonograph and Its Future', North
American Review, 126, Jan/Jun (1878), 527-536.
12
For the exclusive use of M. Hu, 2020.
This document is authorized for use only by Meiyi Hu in
International Business Strategy Winter Semester 2020 taught by
ERIC HUTCHINS, California State Polytechnic University -
Pomona
from Jan 2020 to May 2020.
Gramophone: Reimagining Music SCG-557
Exhibit 4: Talking Machine Parlor
Source: Phonograph Arcade, Patrons Listening to Phonographs
Through Ear Tubes; undated, circa mid-1890s,
https://mediatedsignals.com/tag/cylinders/.
13
For the exclusive use of M. Hu, 2020.
This document is authorized for use only by Meiyi Hu in
International Business Strategy Winter Semester 2020 taught by
ERIC HUTCHINS, California State Polytechnic University -
Pomona
from Jan 2020 to May 2020.
https://mediatedsignals.com/tag/cylinders
Exhibit 6: Sales of the Victor Talking M achine Company,
1901-1913
SCG-557 Gramophone: Reimagining Music
Exhibit 5: US Production Figures for Edison and
Berliner/Johnson, 1893-1903
YEAR EDISON BERLINER/ EDISON BERLINER
MACHINE JOHNSON RECORDS RECORDS
MACHINE (CYLINDER) (DISCS)
27,000
100,000
248,652
713,753
569,154
255,784
256,908
1,696,296
1,966,036
MACHINES
1893-95 NA 1,000 NA
1896 1,239 NA NA
1897 5,167 12,420 87,690
1898 14,255 10,651 428,310
1899 46,097 14,348 1,886,137
1900 41,894 3,054 2,080,132
1901 41,381 7,570 1,976,645
1902 80,257 42,110 4,382,802
1903 113,151 46,601 7,663,142
Source: Martland, Recording History, p. 27.
YEAR RECORDS
1901-02
1902-03
1903-04
1904-05
1905-06
1906-07
1907-08
1908-09
1909-10
1910-11
1911-12
1912-13
Source: Martland, Recording History, p. 114.
256,908 42,110
1,696,296 40,601
1,966,036 47,074
2,595,011 65,591
3,565,679 82,589
7,051,775 107,432
5,248,147 50,732
4,639,463 68,231
5,988,004 94,666
6,205,929 124,927
9,150,374 206,798
11,086,489 251,909
14
For the exclusive use of M. Hu, 2020.
This document is authorized for use only by Meiyi Hu in
International Business Strategy Winter Semester 2020 taught by
ERIC HUTCHINS, California State Polytechnic University -
Pomona
from Jan 2020 to May 2020.
Gramophone: Reimagining Music SCG-557
1 Frederick William Gaisberg, The Music Goes Round (New
York: The Macmillan Company, 1942), 54.
2 Peter Martland, "Gaisberg, Frederick William (1873–1951),"
in Oxford Dictionary of National
Biography (Oxford: Oxford University Press, 2004).
3 Michael S. Kinnear, The Gramophone Company's First Indian
Recordings, 1899-1908 (Bombay:
Popular Prakashan, 1994).
4 Gaisberg, The Music Goes Round, 55.
5 A copy of this original Edison recording is available here:
https://www.youtube.com/watch?v=YBXyuY2J20o.
6 Thomas Edison National Historical Park, Lists and
Inventories, Cylinder phonograph, [D7702]
Document File Series -- 1877: (D-77-02) Edison, T.A. – General
[D7702ZEO; TAEM 14:242].
7 Daily Graphic, 2 April 1878. Quoted in: Sarah Knowles
Bolton, How Success Is Won (Boston: D.
Lothrop, 1885), 189.
8 Thomas A. Edison, "The Phonograph and Its Future," North
American Review 126, no. Jan/Jun
(1878).
9 Ibid., 527.
10 Ibid., 531.
11 Estimate obtained by multiplying $100 by the percentage
increase in the CPI from 1891 to 2017.
12 1910; video available here:
https://www.filmpreservation.org/preserved-films/screening-
room/the-
stenographer-s-friend-1910.
13 Gaisberg, The Music Goes Round, 5.
14 Richard James Burgess, The History of Music Production
(New York: Oxford University Press,
2014), 13-4.
15 H. Shanley Jones, “Will Replace Cheap Piano: This is the
Mission of the Talking Machine” Talking
Machine World vol. 1, no. 3 (March 1905), p. 9.
16 Quoted in: “Timely Talks on Timely Topics,” Talking
Machine World vol. 2, no. 2 (Feb. 1906), p. 11.
17 “Interior View of Douglas Phonograph Co.’s Handsome
Store,” Talking Machine World vol. 2, no. 2
(Feb. 1906), p. 15.
18 Ad by Herzog Art Furniture Co. in Talking Machine World,
vol. 1, no. 4 (April 1905), p. 8; “Trade
Notes from Cincinnati, O.,”, Talking Machine World vol. 2, no.
3 (April 1906), p. 5.
19 Note, in: Talking Machine World vol. 1, no. 1 (Jan. 1905), p.
15.
20 “Piano Dealer Gets Wise,” Talking Machine World vol. 2,
no. 3 (March 1905), p. 3.
21 John Philip Sousa, "The Menace of Mechanical Music,"
Appleton's Magazine 8, no. 3 (1906).
22 Alice Clark Cook, “Faults of Talking Machine as a Musical
Educator, Musical America, 5 August
1916, p. 31.
23 “Trade Notes from Cincinnati: An Interesting Chat with
Rudolf Wurlitzer Jr.,” Talking Machine
World, vol. 2, no. 3 (March 1906), p. 19.
24 “Hard to ‘Pick the Winner,’” Talking Machine World vol. 2
no. 4 [sic! incorrectly numbered 3]
(April 1906), p. 30.
25 Quoted in: Mark Katz, Capturing Sound: How Technology
Has Changed Music, Rev. ed. (Berkeley:
University of California Press, 2010), 59.
26 “Pittsburg’s Budget of News,” Talking Machine World vol.1,
no. 11 (Nov. 1905), p. 8.
27 Edward Lyman Bill, Talking Machine World, vol. 1, no. 5
(May 1905), p. 14.
28 Gaisberg, The Music Goes Round, 26.
29 Peter Martland, Since Records Began: Emi, the First 100
Years (London: Batsford, 1997), 44.
30 Jerrold Northrop Moore, A Voice in Time: The Gramophone
of Fred Gaisberg, 1873-1951 (London:
Hamilton, 1976).
31 Gaisberg, The Music Goes Round, 34.
32 Letter Hawd to Headquarter London, 21 Nov. 1901, EMI
Archives.
33 “India a Great Market,” Talking Machine World vol. 1, no. 4
(April 1905), p. 6.
34 Gaisberg, The Music Goes Round, 48-9.
15
For the exclusive use of M. Hu, 2020.
This document is authorized for use only by Meiyi Hu in
International Business Strategy Winter Semester 2020 taught by
ERIC HUTCHINS, California State Polytechnic University -
Pomona
from Jan 2020 to May 2020.
https://www.filmpreservation.org/preserved-films/screening-
room/the
https://www.youtube.com/watch?v=YBXyuY2J20o
35
40
45
50
55
SCG-557 Gramophone: Reimagining Music
Diary entry 1 November 1902, made available:
http://www.recordingpioneers.com/docs/GAISBERG_DIARIES_
2.pdf.
36 Gerry Farrell, Indian Music and the West (Oxford, New
York: Oxford University Press, 1997), 117.
37 “Developing Our Export Trade,” Talking Machine World
vol. 4, no. 2 (Febr. 1908), p. 18. Quoted in:
Karl Hagstrom Miller, "Talking Machine World: Selling the
Local in the Global Music Industry, 1900-
1920," in Global History: Interactions between the Universal
and the Local, ed. A. G. Hopkins (New
York: Palgrave, 2006), 169.
38 Talking Machine World vol. 6, no. 12 (Dec. 1910), p. 49.
39 Letter London Headquarter to Addis, Calcutta, 6 December
1904, EMI Archives.
“India a Great Market,” Talking Machine World vol. 1, no. 4
(April 1905), p. 6.
41 Gaisberg, The Music Goes Round, 54.
42 Heinrich Bump “Unsere Reise um die Erde. Skizzen von der
großen „Beka“-Aufnahmen-
Expedition,” Phonographische Zeitschrift 7/28, 1906: 582-602,
here: 583-4.
43 Letter Rodkinson, Kolkata to London Headquarter, Dec. 18,
1906, EMI Archives; “Trade News from
All Points of the Compass,” Talking Machine World vol. 3, no.
3 (March 1907), p. 37.
44 Letter Kolkata to London Headquarter, June 28, 1906, EMI
Archives.
Letter London Headquarter to Rodkinson, Kolkata, Nov. 28,
1906, EMI Archives.
46 Talking Machine World vol. 4, no. 2 (Febr. 1908), pp. 18-20.
47 Estimate based on change in consumer price index, see
endnote 11.
48 David Suisman, Selling Sounds: The Commercial Revolution
in American Music (Cambridge,
Mass.: Harvard University Press, 2009), 130.
49 Between $754 million and $1.5 billion in today’s-$; estimate
based on change in consumer price
index, see endnote 11.
Estimate based on change in consumer price index, see endnote
11.
51 Number for 1917. Suisman, Selling, 114.
52 Ibid., 117. For an example, see
http://www.loc.gov/jukebox/victor-book-of-the-opera.
53 Campbell J. Gibson and Emily Lennon, “Historical Census
Statistics on the Foreign-Born
Population of the United States: 1850 TO 1990,” US Bureau of
the Census, Population Division
Working Paper No. 29, Febr. 1999,
https://www.census.gov/population/www/documentation/twps00
29/twps0029.html.
54 https://www1.nyc.gov/assets/planning/download/pdf/data-
maps/nyc-
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S C G - 5 5 7 .docx

  • 1. S C G - 5 5 7 N o v e m b e r 5 , 2 0 1 9 C H R I S T I N A L U B I N S K I Historical Entrepreneurship Case Series Gramophone: Reimagining Music We entered a new world of musical and artistic values. One had
  • 2. to erase all memories of the music of European opera-houses and concert- halls: the very foundations of my musical training were undermined.1 --Fred Gaisberg on his experience of recording in India, 1902 T he professional talent scout Fred Gaisberg (see Exhibit 1 for picture) found himself at a loss. He had arrived in Calcutta (Kolkata) at the end of October 1902, to record local artists whose music could be sold on gramophone discs. This was not the first scouting trip for the 29-year old. Gaisberg had worked for his employer, the Anglo-American Gramophone Co., since 1898 and had crisscrossed Europe to detect artistic talents—with enormous success. He proudly reflected on his sessions with the famous tenor Enrico Caruso in Milan, only six short months ago. These recordings not only enhanced Gaisberg's own reputation but also established the gramophone as an important means for spreading art and culture to the masses.2 However, in India, Gaisberg encountered new challenges. The first musicians he recorded were found with the help of two Indian intermediaries from the local theater scene. 3 Yet, Gaisberg had his doubts about the music he heard. Observing one performance at an Indian theater, he noticed: Quite arbitrarily, there was introduced a chorus of young Nautch girls [female Indian performers] […] accompanied by fourteen brass instruments all playing in unison. I had yet to learn that the oriental ear was unappreciative of chords and
  • 3. harmonic treatment and only demanded the rhythmic beat of the accompaniment of the drums. At this point we left.4 On the way home, Gaisberg pondered: How was he going to recognize the most promising Indian performers if their music was so hard to understand? How would he ever be able to convince his customers that the gramophone should be considered as a serious musical instrument? And would anyone even like the songs that he was about to preserve for all eternity? For the exclusive use of M. Hu, 2020. This document is authorized for use only by Meiyi Hu in International Business Strategy Winter Semester 2020 taught by ERIC HUTCHINS, California State Polytechnic University - Pomona from Jan 2020 to May 2020.
  • 4. SCG-557 Gramophone: Reimagining Music The Origins of the Gramophone Business The gramophone was a remarkable invention. It was conceived by the serial inventor Thomas Edison, who, in 1877, discovered a way to record sound on tinfoil-coated cylinders. Edison tested the machine by speaking the nursery rhyme “Mary Had a Little Lamb” into the mouthpiece, and was delighted as the machine played his words back to him.5 In his laboratory notebook, he casually jotted down the name “phonograph” for the machine. However, as it turned out, the term phonograph was commonly used as a synonym for “shorthand;” a method of rapid writing with abbreviations and symbols when dictating. Edison and his staff brainstormed alternatives: Should they call the machine Polyphone (manifold sounder)? Cosmophone (universal sounder) or Antiphone (back-talker)? Maybe Chronophone (time-announcer) or Omphlegraph (voice writer)? (For a full list of the names considered, see Exhibit 2 6) In the end, the alternatives were unsatisfactory and Edison received a patent for his “Phonograph or Speaking Machine” on February 19, 1878. Competitors, notably
  • 5. Alexander Graham Bell and Emile Berliner, who further developed the technology of sound reproduction, distinguished their products from Edison’s by using alternative names, such as “gramophone,” “graphophone,” and “talking machine.” Like any good entrepreneur, Edison had great plans for his invention and immediately thought about commercialization. He opined, “I have invented a great many machines, but this is my baby, and I expect it to grow up and support me in my old age.”7 As early as January 1878, he licensed his technology to The Edison Speaking Phonograph Company, which exploited the new machine by exhibiting it. Edison himself received $10,000 for the manufacturing and sales rights and 20% of the profits. However, the machine remained difficult to operate and the recordings etched on tin-foil could only play about two minutes of audio and were ruined after a few uses. Moreover, exhibiting the machine was not going to generate a constant stream of income. What if the novelty wore off? Eager to make his invention a long-term commercial success, Edison sat down and speculated about other lucrative applications.8 He explained that the talking machine “brings its possibilities within the range of the speculative imaginations” but also admitted to being “in a somewhat chaotic condition of mind as to where to draw the dividing line.”9 Working through the mental turmoil, Edison presented a list of the twelve most promising applications for his invention: 1. Letter writing and other forms of dictation 2. Books [i.e. reading of existing books] 3. Educational Purposes
  • 6. 4. Music 5. Family Record 6. Phonographic Books [i.e. newly designed for recordings and to preserve languages] Christina Lubinski, Professor of Clinical Entrepreneurship at the University of Southern California, prepared this case. This case in the Historical Entrepreneurship Case Series was supported by a grant from the Founder Central Initiative. This case was developed from field and archival research. Cases are developed solely as the basis for class discussion and are not intended to serve as endorsements, sources of primary data or illustrations of effective or ineffective management. Copyright © 2019 Lloyd Greif Center for Entrepreneurial Studies, Marshall School of Business, University of Southern California. For information about Greif Center cases, please contact us at [email protected] This publication may not be digitized, photocopied, or otherwise reproduced, posted or transmitted without the permission of The Lloyd Greif Center for Entrepreneurial Studies. 2 For the exclusive use of M. Hu, 2020. This document is authorized for use only by Meiyi Hu in International Business Strategy Winter Semester 2020 taught by ERIC HUTCHINS, California State Polytechnic University - Pomona from Jan 2020 to May 2020. mailto:[email protected]
  • 7. Gramophone: Reimagining Music SCG-557 7. Musical boxes 8. Toys 9. Clocks 10. Advertising 11. Speech and other Utterances 12. Revolutionize the systems of telephone and telegraphy Edison saw by far the greatest potential in the field of office dictations and “the design [of the machine] is made with a view to its utility for that purpose.”10
  • 8. He reasoned that the phonograph would allow businessmen to dictate from anywhere, keep duplicates as needed, eliminate many of their clerk positions, and improve the privacy of business correspondence (see Exhibit 3 for his own words on the matter). Eventually, he predicted, stenographers would be disposable altogether, when phonographs became so prevalent that businessmen could send each other cylinders with recordings rather than letters. In addition, one may argue that the corporate customers Edison targeted were less likely to shy away from the steep price of the machine ($150 in 1891; approx. $2,780 today.)11 However, it took almost a decade before businessman Jesse H. Lippincott purchased the Edison Phonograph Company as well as technology licenses from some of the other competitors in the industry. By 1888, phonographs were leased as office dictating machines to various companies. However, financial success eluded the entrepreneurial venture. Moreover, not everybody celebrated the arrival of this new technology. The first National Phonograph Association Convention in 1890 addressed the pressing problem of how to overcome opposition from stenographers, who feared that the machine would devalue their skills and bring unemployment (the film The Stenographer’s Friend; or, What Was Accomplished by an Edison Business Phonograph? addressed some of the widely shared concerns12). When Lippincott fell ill, Edison, as the main creditor of the business, tried to continue it but eventually had to declare bankruptcy. From Office to Opera As the dictation business failed, Edison and other pioneering
  • 9. entrepreneurs moved into the entertainment space. Besides Edison’s new company, the “National Phonograph Company,” his main competitors were Edward Easton’s “Columbia Phonograph Company” (founded in 1887) and Emile Berliner’s “United States Gramophone Company” (founded in 1894). While Edison recorded sounds on wax cylinders, Emile Berliner invented the first discs made initially of hard rubber and later shellac. Consumers had to decide for either the cylinder or the disc system, with neither having a strong competitive advantage. Recordings made on cylinder could not be played on disc machines, and vice versa. The first move into the entertainment space was the opening of talking machine parlors (see Exhibit 4) in the 1890s, where customers could listen to a recording in exchange for a nickel. Gaisberg mockingly described these penny arcades: “It was ludicrous in the extreme to see ten people grouped about a phonograph, each with a tube leading from his ears, grinning and laughing at what he heard.”13 It was not surprising that Gaisberg rejected the unsophisticated musical entertainment of the parlors. Growing up in Washington DC, Gaisberg was a born musician. As a young child, he sang in the choir of famous composer and conductor John Philipp Sousa. He also spent years perfecting his piano play. At age sixteen, still in high school, he worked part-time for the Columbia Phonograph Company on recordings of the whistler John York Atlee, who he also accompanied on the piano. When Gaisberg graduated in 1891, he trained with Columbia and became a full-
  • 10. time producer. In 1894, he met Emile 3 For the exclusive use of M. Hu, 2020. This document is authorized for use only by Meiyi Hu in International Business Strategy Winter Semester 2020 taught by ERIC HUTCHINS, California State Polytechnic University - Pomona from Jan 2020 to May 2020.
  • 11. SCG-557 Gramophone: Reimagining Music Berliner, the inventor of the disc, and started working for him. His tasks included scouting for talent, playing accompaniments, and washing up the acid tanks.14 He learned the business inside and out. The accomplished musician Gaisberg was not alone in objecting to the “nickel-in-the-slot” machines. The trade journal Talking Machine World reported in 1905, “One of the main obstacles to the introduction of the graphophone into many homes is, no doubt, the popular impression that the talking machine in still only a scientific toy.”15 The penny arcades were fine to earn a few nickels but they cashed in on the novelty of the technology and the curiosity and amazement of the customers. The burning question, however, was how to generate a consistent stream of income. The answer of the US manufacturers was to go after “high- cultured” customers, who they assumed could learn to appreciate the gramophone not for its novelty but for its ability to bring artful music to their living rooms. Repositioning the gramophone as a serious musical instrument was not an easy task. Manufacturers and dealers started by defining the piano and the violin as the gramophone’s left and right competitors. C. V. Henkel of the Douglas Phonograph Co. stressed the “absolute perfection in sound reproduction” and asked pointedly: “Can you name any musical instrument that can compare
  • 12. with the incomparable talking machine?”16 Stores received a make-over to resemble the most elegant piano showrooms,17 and furniture makers designed beautiful high-class cabinets for the gramophones to fit them into the living rooms of the upper classes.18 When well-respected piano dealers, such as Barnett, Samuel & Sons, added talking machine departments to their stores, the industry breathed a little easier.19 A trade journal reported, not without pride, about one piano dealer who admitted that he used to consider talking machines “beneath my dignity” but now saw them as “cultivating a latent love for music among the masses, which in time will create a demand for musical instruments of every description.”20 Unfortunately for the industry, critics of the gramophone were also numerous and vocal. Some criticized the poor quality of the recordings or the fact that both Edison’s cylinders and Berliner’s discs could only play two to three minutes of audio, while musical live performances at the time often lasted for hours. Indeed, professional producers, like Gaisberg, had to cut up longer performances and even reduced the lengths of a song to fit the new medium. Some artists objected to the fact that the recordings eliminated the important interaction between the performer and the audience, and isolated the music lover who now enjoyed the music alone, rather than in the company of family and friends. Others feared for the effect of the gramophone on American culture. John Philip Sousa, Gaisberg’s early teacher, ranted against the gramophones, which “sing for us a song or play for us a piano, in substitute for human skill, intelligence, and soul.” He foresaw
  • 13. “a marked deterioration in American music and musical taste, an interruption in the musical development of the country, and a host of other injuries to music in its artistic manifestation, by virtue—or rather by vice—of the multiplication of the various music-reproducing machines.”21 Alice Clark Cook, a writer for the classical music magazine Musical America, vexed: “As a diet of canned foods […] injures taste and digestion, so does a diet of ‘canned’ music lead to the destruction of individual taste, to indifference and loss of appetite.”22 To counter such claims, manufacturers moved even more decidedly into the field of “serious” artful music (e.g., classical music and opera) and engaged in marketing campaigns highlighting the gramophone’s role in promoting the arts, not destroying them. Manufacturers also invested in specialized education departments to stress the gramophone’s use as an educational tool for the promotion of classical music in schools and universities. Rudolph Wurlitzer Jr. of the eponymous company argued that the talking machine “offers to persons who have neither means to attend concerts of good music, nor ability to play upon an instrument, the opportunity to become familiarized with high-class selections and the personal interpretations of the best instrumental and vocal artists.”23 4 For the exclusive use of M. Hu, 2020. This document is authorized for use only by Meiyi Hu in International Business Strategy Winter Semester 2020 taught by ERIC HUTCHINS, California State Polytechnic University -
  • 14. Pomona from Jan 2020 to May 2020. https://easier.19 https://classes.18 https://tanks.14 Gramophone: Reimagining Music SCG-557
  • 15. Similarly, John Prescott of the American Record Co. expressed his belief that “the talking machine is becoming more and more an important factor in educating the public taste.”24 By the beginning of the twentieth century, the talking machine was inextricably intertwined with education and high culture. A journalist of National Music Monthly argued that opera had increased in popularity because of the influence of the gramophone: “People have heard in their own homes beautiful excerpts from the greatest operas, and have come to know their meaning.”25 An observer in Pittsburg found that, “The talking machine in its earlier stage was regarded more or less as a toy and people of culture and refinement refused to buy them. […] [T]hese objections have been swept aside and as a result we see among the buyers […] some of the best and most cultured people of the city.”26 Edward Lyman Bill, the editor of Talking Machine World, even made a claim to the gramophone’s ability to bring culture to the entire world: “Every nation should strive to cultivate the art instinct […] it is through the talking machine that millions of people in all lands are enabled to hear the music of the world’s greatest artists.”27 Into the Unknown Inspired by such missionary zeal, it is not surprising that an ever-growing number of gramophone manufacturers competed not just in the US but also in foreign markets. Fred Gaisberg’s employer, the Gramophone Co., was early in targeting foreign markets all around the world. The company was founded in 1898 in London, England, on behalf of Emile
  • 16. Berliner. That same year, Gaisberg moved from the US to London to set up the first recording studio in Europe and started his long and successful career as a record producer. Shortly thereafter, in November 1899, the Gramophone Co. acquired the famous trademark “His Master’s Voice,” displaying the fox terrier Nipper listening to a gramophone. Gaisberg went on a series of recording tours to expand the portfolio of the Gramophone Company. He started with a European tour covering Leipzig, Vienna, Budapest, Milan, Paris and Madrid in the summer of 1899. Gaisberg remembered: “This expedition gave me vast experience in recording under various conditions and produced a rich harvest of musical records, both exciting and delightful to my provincial mind.” 28 The results were so promising that Gaisberg’s manager sent him almost immediately on a second tour across the British Isles with his companion William Sinkler Darby. The two young engineers were regarded as elite employees with special skills. Within the company, they were known as “the experts” or “the boys,” partly because of their young age and partly because of their pleasure-seeking lifestyle during travels.29 In February 1900, Gaisberg embarked upon a major Russia tour, where he recorded for a full six months.30 “I had seen opera performances on a scale unbelievably lavish,” Gaisberg noted after the trip. “I had heard and negotiated with a bevy of the greatest and perhaps most spoiled artists of that epoch.”31 Another opportunity awaited them: India. In India, English and Indian musical instrument dealers began to see talking machines emerge as a high potential line of business, although they struggled with
  • 17. adequately serving a market that was spread out over such a vast territory. In July 1901, Gramophone Co. sent his agent, John Watson Hawd, to Calcutta to investigate the emerging opportunity. Hawd traveled widely in India and concluded: “I think we shall do a fair business here if we only have the goods, but until we get native records we shall only be able to sell to Europeans and they are only 1 per 100 natives.”32 Being on the ground, it became clear to Hawd that the recordings made in Europe and the US would not sell in India. Other traveling agents and scouts confirmed that “American records are absolutely unknown” and “[o]rchestral records are also little in demand.”33 Moreover, the many different languages and dialects spoken in India and the religious diversity made this a challenging music market. Different groups of people wanted different music. Hawd was relentless in telling his superiors: “You must however send one man to make records.” Not surprisingly, 5 For the exclusive use of M. Hu, 2020. This document is authorized for use only by Meiyi Hu in International Business Strategy Winter Semester 2020 taught by ERIC HUTCHINS, California State Polytechnic University - Pomona from Jan 2020 to May 2020. https://months.30 https://travels.29
  • 18. SCG-557 Gramophone: Reimagining Music the Gramophone Co. selected Fred Gaisberg, their most experienced scout. He was accompanied by his 19-year-old assistant George Dillnutt, the businessman Thomas Dowe Addis and Addis’ wife. According to Gaisberg, the aim of this trip was “to open up new markets, establish agencies, and acquire a
  • 19. catalogue of native records. [...] As we steamed down the channel into the unknown I felt like Marco Polo starting out on his journeys.”34 However, making local recordings proved more difficult than anyone had anticipated. Upon arrival in Calcutta, Gaisberg first struggled to get his luggage with the recording equipment cleared at customs. After a total of five days of waiting, he declared happily: “Today we at last succeeded in getting our stuff out of the Custom House.”35 It took another week before they had identified the first artists and Gaisberg noted that the first recordings made on November 8, were of two nautch girls “with miserable voices.”36 The accomplished piano player Gaisberg had a hard time making sense of the Indian music. A perfectionist, Gaisberg wanted all recordings to be flawless because unlike live performances, they were supposed to last. However, it was difficult for him to evaluate the Indian performances. Edward Burns, manager of the Columbia export department, confirmed that the talent scouts traveling around were generally “strangers in the countries to which they may be despatched [sic], knowing little, if anything, of the language and customs of the people and ignorant of the material from which to choose suitable recording-making talent.”37 The result was a hodgepodge of questionable material. After their first six-week stay, Gaisberg and his crew went home with over 500 masters, of which records were manufactured in Europe and shipped to India in April 1903. Other companies followed their example and recorded local artists all over the Indian subcontinent. In lieu of any deeper understanding of the music, they relied on easily observables
  • 20. proxies, most importantly language variety. Recording engineers sent detailed reports on the different dialects and languages spoken in all parts of the world.38 The Gramophone Co. instructed its local agent in India to extend the catalogue by 2,500 records in order to cover the twelve languages that were considered most popular.39 The lack of instructions towards musical genre or style mirrors the failure to understand the local music; however, the decision to provide music in a variety of languages was a first step toward diversifying the portfolio. Unexpectedly for many of the scouts, quite a few of these Indian recordings turned out to be very successful. “To be sure the selections are weird,” argued one recording engineer about his activities in India, “but they sell like hot cakes.” Following a market rather than an art logic, this recording engineer was optimistic about the future: “It may appear queer, but India is the best place on earth for talking machines. The masters must be made on the spot, and be native music … but India … appears to me a great field for American enterprise in this line.”40 Reliable local middlemen could have been extremely valuable in this context, but they were also rare and highly sought after in the competitive Indian market. Gaisberg first turned to the English agents living in India but was disappointed: “They could be living on another planet for all the interest they took in Indian music.”41 A German competitor, Beka Records, attempted to collaborate with locals in Calcutta. Heinrich Bump, owner of the company and lead recording scout, asked a partner in Bombay to introduce him to a friend in Calcutta. However, that friend was unable to accommodate them and
  • 21. instead referred them to a pal, who again passed their wishes on to another associate. The latter was supposed to engage the right artists and attend the recording sessions to guarantee that performers sing the right pieces in the pre-selected languages. However, the lengthy negotiations between the partners yielded few results, and eventually Bump felt that he was being taken advantage of.42 Both the Gramophone Co. and Beka worked with an Indian trading company, Valabhdas Lakhmidas and Co. with great experience in record sales. Because their services were so valuable, Beka offered Valabhdas favorable contract conditions, sending large quantities of goods on consignment and 6 For the exclusive use of M. Hu, 2020. This document is authorized for use only by Meiyi Hu in International Business Strategy Winter Semester 2020 taught by ERIC HUTCHINS, California State Polytechnic University - Pomona from Jan 2020 to May 2020. https://popular.39 https://world.38
  • 22. Gramophone: Reimagining Music SCG-557 imposing no minimum sales. Gramophone Co. feared that this practice put them at a disadvantage to Beka, and the Germans indeed managed to complete 1,000 Indian records with the help of their local partner.43 Eventually, Valabhdas and Beka entered an exclusive agreement. In addition to the musical artists that Valabhdas selected, they also recorded political speeches and patriotic songs, which became very popular in the context of an anti-colonial protest movement in 1906. Gramophone Co. considered the competition inferior: “The ‘Beka’ Records (Native) are . . . poor stuff. No class whatever, and not to be compared with our Records.”44 However, they sold well and Gramophone Co. debated the option of
  • 23. reissuing records that had been withdrawn from the catalogue at a cheaper price “as a measure for the destruction of the Beka Agency.”45 Over time, the internationalization departments became better at identifying characteristics of foreign music outside of language. Edward Burns of the Columbia export department stressed how he and his colleagues studied migration patterns of different ethnic groups, the musical tastes of different social classes and religions, and even color preferences for designing labels. They discovered that in several foreign countries, where ancestors were particularly worshiped, hearing and possibly preserving “the voice of some dead and gone patriarch of the family” was a major selling point for the gramophone. Columbia even developed a new diaphragm for the recordings abroad. US artists, Burns argued, are “trained, so that high notes are taken by gradation, and they are familiar with the surroundings and apparatus in the laboratory.” However, in the East, he found “voices are explosive, and the diaphragm ‘blasts’,” which made a change in the equipment necessary to better “absorb these sharp inequalities of sound.”46 Based on the experiences with his customers abroad, Burns established three categories of records: (i) native or popular air or monologues, (ii) folk and standard native songs, and (iii) high culture and opera music in foreign languages. Many employees of US gramophone companies traveled abroad to gain first-hand experiences or familiarized themselves with foreign music from the export departments of their respective companies. Continuous travels and learning by trial-and-error helped the gramophone companies to develop more sophisticated strategies for their export markets.
  • 24. The Big Three in the US In the meantime, the US market matured. The “big three” (Columbia, Edison, and Berliner) were locked in an intense commercial rivalry, aggravated by lawsuits about patents and the system competition between Edison’s cylinder and Berliner’s disc- format (while Columbia dealt in both.) Production figures (see Exhibit 5) reveal that from 1899 to 1901, the US industry went through a slump due to intense rivalry, bitter recrimination and costly litigation. In 1901, Emile Berliner withdrew from his business due to this legal dispute and sold his patents and rights to Eldridge Reeves Johnson, an individual who made early contributor to the technological and production side of the business, but lacked significant experience in music. Johnson launched a new company, the Victor Talking Machine Company, in 1901 and signed a multipart commercial agreement with the internationally successful Gramophone Co., including a non-compete agreement and the sharing of trademarks and research and development. The industry was now a patent-based oligopoly and the new big three (Columbia, Edison, and Johnson) would keep a virtual stranglehold on the US industry until 1921. Fighting the prejudices against “canned” mechanical music, US manufacturers established an expensive star cult centered on high-class and high-culture professional musicians. Male tenors were particularly sought after because early sound recording technology had problems capturing high-end and low-end sounds. This not only led some bands to replace
  • 25. drums with cowbells, but also meant that female voices and high-pitched instruments, such as violins, recorded rather poorly. Male tenors by contrast could be captured particularly well. Gaisberg recorded Fyodor Chaliapin and other members of the Imperial Opera in Saint Petersburg as well as world- famous tenor Enrico Caruso in Milan, whose records were labeled with a red seal to mark the distinct category. These records were also used by many 7 For the exclusive use of M. Hu, 2020. This document is authorized for use only by Meiyi Hu in International Business Strategy Winter Semester 2020 taught by ERIC HUTCHINS, California State Polytechnic University - Pomona from Jan 2020 to May 2020. https://partner.43
  • 26. SCG-557 Gramophone: Reimagining Music aspiring artists who could now practice their own playing based on recordings of a well-established performer. These Red Seal labels became popular in the high- brow culture of the US and cemented Victor’s position in the industry (see Exhibit 6 for sales numbers.) Caruso and a few other superstar artists received sizeable financial rewards for their efforts. From mid-1915 to mid-1916, Caruso earned more than $78,000 ($1.96 million in 2019 dollars 47) in royalties from his recordings in the US.48 The marketing strategy that supported the focus on high-brow music required continuous investment. Victor spent $52.7 million49 on advertising from 1901 to 1929, averaging 8.24 percent of the company’s annual expenditures, which made Victor one of the most prodigious and best-known advertisers in the world. In 1912 alone, the company allotted more than $1.5 million 50 ($39.1 million
  • 27. in 2019 dollars) for advertising. By the mid-1910s, Victor was one of the top five magazine advertisers in the US, although in terms of assets it ranked as only the 174th-largest company.51 Victor also invested heavily in other promotional material, such as record and phonograph catalogues as well as specialized publications, such as the Victor Book of the Opera, a hardcover book containing illustrated descriptions of opera plots, translations of arias and integrated listings of Victor opera records.52 The opera had a devoted following among the social elites but was also, occasionally, of interest to popular audiences, sometimes in adapted and modified forms. Even in the immigrant communities in large US cities, people enjoyed opera performances from their home countries. In 1910, 14.7 percent of the overall US population were foreign-born.53 In New York City, a staggering 40.8 percent of the population were first generation immigrants (compared to 18 percent in the 1970s and 37 percent in 2019). In other large cities, such as Boston (36 percent), Detroit (33.5 percent), Chicago (28.7 percent) and Philadelphia (25 percent), the immigrant population made up a significant part of the inhabitants.54 In the immigrant neighborhoods, one could even find small dealers specializing in records of a particular language group and refusing to carry anything else.55 The Victor (and Gramophone Co.) trademark “His Master’s Voice” became an iconic household name. Starting in 1906, the campaign was showcased on a heavily illuminated sign on Herald Square in New York City above the legend “The Opera at Home.” In this ad, Nipper, the dog, stood 25 feet high
  • 28. and was seen by an estimated 800,000 people daily. The advertisement was purportedly the most expensive in the world at that time.56 What’s Next? When World War I broke out on July 28, 1914, all experts in the industry were stunned. This was the first general war between the European powers since the defeat of Napoleon in 1815. It ended a long period of relative stability and great economic integration. Like many observers, the gramophone executives were taken by surprise at the suddenness of the war crisis. The chairman of the Gramophone Co. Trevor Williams noted: “When the war burst upon us … we, with the rest of civilization, were quite unprepared for such a contingency.”57 The shock of the war caused panic among buyers. Consumers’ first reaction was to postpone the purchase of luxury and entertainment goods, like records and gramophones. A week after the war in Europe broke out, Alfred Clark of the Gramophone Co. wrote to Eldridge Johnson in the US: “There is no business, and it would be foolish to attempt to do any.”58 The nations at war included all of their colonies and dependent territories in their war efforts. India, for example, followed Great Britain and declared war on Germany in September 1914. A US trade journal observed that in the highly integrated world economy, “[A]ll of the manufacturers have European factories and branches, which will necessarily suffer materially from the effects of the war.” Shipping product from US factories to Europe was also not an option because there was “no demand for talking machines and records in Europe” and
  • 29. “foreign shipping has practically ceased.”59 Debates began: Where should the industry turn now? 8 For the exclusive use of M. Hu, 2020. This document is authorized for use only by Meiyi Hu in International Business Strategy Winter Semester 2020 taught by ERIC HUTCHINS, California State Polytechnic University - Pomona from Jan 2020 to May 2020. https://inhabitants.54 https://foreign-born.53 https://records.52 https://company.51 Gramophone: Reimagining Music SCG-557 Exhibit 1: Frederick William Gaisberg (1 January 1873 – 2 September 1951) Gaisberg (l) with Sir Edward Elgar and Yehudi Menuhin outside the EMI Abbey Road studios after the recording of Elgar's Violin Concerto in 1932.
  • 30. Source: Wikipedia; Under Fair Use. 9 For the exclusive use of M. Hu, 2020. This document is authorized for use only by Meiyi Hu in International Business Strategy Winter Semester 2020 taught by ERIC HUTCHINS, California State Polytechnic University - Pomona from Jan 2020 to May 2020. SCG-557 Gramophone: Reimagining Music Exhibit 2: List of Names for the Talking Machine, 1877 10 For the exclusive use of M. Hu, 2020. This document is authorized for use only by Meiyi Hu in International Business Strategy Winter Semester 2020 taught by ERIC HUTCHINS, California State Polytechnic University - Pomona from Jan 2020 to May 2020.
  • 31.
  • 32. Gramophone: Reimagining Music SCG-557 Exhibit 2: List of Names for the Talking M achine, 1877, continued Auto-Electrograph = Electric Pen Tel-autograph Tel-autophone Polyphone = Manifold Sounder Autophone = Self sounder Kosmophone = Universal Sounder Acoustophone = Sound hearer = Audible speaker Octophone = Ear-sounder = speaker Anitphone = Back-talker Liguphone = Clear speaker Minuttophone = Minute-sounder Meistophone = Smallest sounder Anchiphone = Near sounder or speaker Palmatophone = Vibration sounder Chronophone = Time-announcer = Speaking clock Didaskophone = Teaching speaker, Portable teacher Glottophone = Language sounder or speaker Climatophone = Weather announcer Atmophone = Fog sounder or Vapor- speaker Palmophone = Pendulum sounder or Sounding pendulum Pinakophone = Sound Register Hemerologophone = Speaking almanac Kalendophone = Speaking Calendar Sphygmophone = Pulse speaker Halmophone = Heart-beat sounder
  • 33. Seismophone = Earthquake sounder Electrophone = Electric speaker Brontophone = Thunder speaker Klangophone = Bird-cry sounder Surigmophone = Whistling sounder Bremophone = Wind sounder Bittakophone = Parrot speaker Krogmophone = Croaking or Cawing sounder Hulagmophone = Barking sounder Trematophone = Sound borer Telephemist telephemy telepheme Electrophemist electrophemy electropheme Phemegraph = speech writer Omphegraph -gram = voice writer or researcher Melodograph Melograph Melpograph - gram = song writer Epograph = speech writer, lecture or sermon Rhetograph = speech writer Kinemograph = motion writer Atmophone = vapor or steam sound Aerophone = air sound Symphraxometer = pressure measurer Synothemeter = pressure measurer Orcheograph = vibration record Orcheometer Source: 1877 [Supplied year] -- Lists and Inventories/Cylinder phonograph [D7702] Document File Series -- 1877: (D-77-02) Edison, T.A. – General [D7702ZEO; TAEM 14:242]. Courtesy of Thomas Edison National Historical Park.
  • 34. 11 For the exclusive use of M. Hu, 2020. This document is authorized for use only by Meiyi Hu in International Business Strategy Winter Semester 2020 taught by ERIC HUTCHINS, California State Polytechnic University - Pomona from Jan 2020 to May 2020.
  • 35. SCG-557 Gramophone: Reimagining Music Exhibit 3: Selected Excerpts from “The Phonograph and Its Future” by Thomas Edison Among the more important [applications for the phonograph] may be mentioned: Letter-writing, and other forms of dictation books, education, reader, music, family record; and such electrotype applications as books, musical-boxes, toys, clocks, advertising and signaling apparatus, speeches, etc., etc. Letter-writing: The apparatus now being perfected in mechanical detail will be the standard phonograph, and may be used for all purposes, except such as require special form of matrix, such as toys, clocks, etc., for an indefinite repetition of the same thing. The main utility of the phonograph, however, being for the purpose of letter writing and other forms of dictation, the design is made with a view to its utility for that purpose. … [I]t is desirable to have but one class of machine throughout the world. …The practical application of this form of phonograph for communications is very simple. A sheet of foil is placed in the phonograph, the clock-work set in motion, and the matter dictated into the mouth-piece without other effort than when dictating to a stenographer. It is then removed, placed in a suitable form of envelope, and sent through the ordinary channels to the correspondent for whom designed. He, placing it upon his phonograph, starts his clock-
  • 36. work and listens to what his correspondent has to say. Inasmuch as it gives the tone of voice of his correspondent, it is identified. As it may be filed away as other letters, and at any subsequent time reproduced, it is a perfect record. As two sheets of foil have been indented with the same facility as a single sheet, the “writer” may thus keep a duplicate of his communication. As the principal of a business house, or his partners now dictate the important business communications to clerks, to be written out, they are required to do no more by the phonographic method, and do thereby dispense with the clerk, and maintain perfect privacy in their communications. The phonograph letters may be dictated at home, or in the office of a friend, the presence of a stenographer not being required. The dictation may be as rapid as the thoughts can be formed, or the lips utter them. The recipient may listen to his letters being read at a rate of from 150 to 200 words per minute, and at the same time busy himself about other matters. Injections, explanations, emphasis, exclamations, etc., may be thrown into such letters, ad libitum. In the early days of the phonograph, ere it has become universally adopted, a correspondent in Hong-Kong may possibly not be supplied with an apparatus, thus necessitating a written letter of the old-fashioned sort. In that case the writer would use his phonograph simply as a dictating-machine, his clerk writing it out from the phonograph at leisure, causing as many words to be uttered at one time as his memory was capable of retaining until he had written them down. This clerk need not be a stenographer, nor need he have been present when the letter was
  • 37. dictated, etc. The advantages of such an innovation upon the present slow, tedious, and costly methods are too numerous, and too readily suggest themselves, to warrant their enumeration, while there are no disadvantages which will not disappear coincident with the general introduction of the new method. Dictation: All kinds and manners of dictation which will permit of the application of the mouth of the speaker to the mouth-piece of the phonograph may be as readily effected by the phonograph as in the case of letters. … It would be even worth while to compel witnesses in court to speak directly into the phonograph, in order to thus obtain an unimpeachable record of their testimony. Source: T. A. Edison, 'The Phonograph and Its Future', North American Review, 126, Jan/Jun (1878), 527-536. 12 For the exclusive use of M. Hu, 2020. This document is authorized for use only by Meiyi Hu in International Business Strategy Winter Semester 2020 taught by ERIC HUTCHINS, California State Polytechnic University - Pomona from Jan 2020 to May 2020.
  • 38. Gramophone: Reimagining Music SCG-557 Exhibit 4: Talking Machine Parlor Source: Phonograph Arcade, Patrons Listening to Phonographs Through Ear Tubes; undated, circa mid-1890s, https://mediatedsignals.com/tag/cylinders/. 13 For the exclusive use of M. Hu, 2020. This document is authorized for use only by Meiyi Hu in International Business Strategy Winter Semester 2020 taught by ERIC HUTCHINS, California State Polytechnic University - Pomona from Jan 2020 to May 2020. https://mediatedsignals.com/tag/cylinders
  • 39. Exhibit 6: Sales of the Victor Talking M achine Company, 1901-1913 SCG-557 Gramophone: Reimagining Music Exhibit 5: US Production Figures for Edison and Berliner/Johnson, 1893-1903 YEAR EDISON BERLINER/ EDISON BERLINER MACHINE JOHNSON RECORDS RECORDS MACHINE (CYLINDER) (DISCS) 27,000 100,000 248,652 713,753 569,154 255,784 256,908 1,696,296 1,966,036 MACHINES 1893-95 NA 1,000 NA 1896 1,239 NA NA 1897 5,167 12,420 87,690 1898 14,255 10,651 428,310
  • 40. 1899 46,097 14,348 1,886,137 1900 41,894 3,054 2,080,132 1901 41,381 7,570 1,976,645 1902 80,257 42,110 4,382,802 1903 113,151 46,601 7,663,142 Source: Martland, Recording History, p. 27. YEAR RECORDS 1901-02 1902-03 1903-04 1904-05 1905-06 1906-07 1907-08 1908-09 1909-10 1910-11 1911-12 1912-13 Source: Martland, Recording History, p. 114. 256,908 42,110 1,696,296 40,601 1,966,036 47,074 2,595,011 65,591 3,565,679 82,589 7,051,775 107,432 5,248,147 50,732 4,639,463 68,231 5,988,004 94,666 6,205,929 124,927 9,150,374 206,798
  • 41. 11,086,489 251,909 14 For the exclusive use of M. Hu, 2020. This document is authorized for use only by Meiyi Hu in International Business Strategy Winter Semester 2020 taught by ERIC HUTCHINS, California State Polytechnic University - Pomona from Jan 2020 to May 2020.
  • 42. Gramophone: Reimagining Music SCG-557 1 Frederick William Gaisberg, The Music Goes Round (New York: The Macmillan Company, 1942), 54. 2 Peter Martland, "Gaisberg, Frederick William (1873–1951)," in Oxford Dictionary of National Biography (Oxford: Oxford University Press, 2004). 3 Michael S. Kinnear, The Gramophone Company's First Indian Recordings, 1899-1908 (Bombay: Popular Prakashan, 1994). 4 Gaisberg, The Music Goes Round, 55. 5 A copy of this original Edison recording is available here: https://www.youtube.com/watch?v=YBXyuY2J20o. 6 Thomas Edison National Historical Park, Lists and Inventories, Cylinder phonograph, [D7702] Document File Series -- 1877: (D-77-02) Edison, T.A. – General [D7702ZEO; TAEM 14:242]. 7 Daily Graphic, 2 April 1878. Quoted in: Sarah Knowles Bolton, How Success Is Won (Boston: D. Lothrop, 1885), 189. 8 Thomas A. Edison, "The Phonograph and Its Future," North American Review 126, no. Jan/Jun (1878). 9 Ibid., 527. 10 Ibid., 531. 11 Estimate obtained by multiplying $100 by the percentage increase in the CPI from 1891 to 2017. 12 1910; video available here: https://www.filmpreservation.org/preserved-films/screening- room/the- stenographer-s-friend-1910. 13 Gaisberg, The Music Goes Round, 5. 14 Richard James Burgess, The History of Music Production (New York: Oxford University Press, 2014), 13-4. 15 H. Shanley Jones, “Will Replace Cheap Piano: This is the
  • 43. Mission of the Talking Machine” Talking Machine World vol. 1, no. 3 (March 1905), p. 9. 16 Quoted in: “Timely Talks on Timely Topics,” Talking Machine World vol. 2, no. 2 (Feb. 1906), p. 11. 17 “Interior View of Douglas Phonograph Co.’s Handsome Store,” Talking Machine World vol. 2, no. 2 (Feb. 1906), p. 15. 18 Ad by Herzog Art Furniture Co. in Talking Machine World, vol. 1, no. 4 (April 1905), p. 8; “Trade Notes from Cincinnati, O.,”, Talking Machine World vol. 2, no. 3 (April 1906), p. 5. 19 Note, in: Talking Machine World vol. 1, no. 1 (Jan. 1905), p. 15. 20 “Piano Dealer Gets Wise,” Talking Machine World vol. 2, no. 3 (March 1905), p. 3. 21 John Philip Sousa, "The Menace of Mechanical Music," Appleton's Magazine 8, no. 3 (1906). 22 Alice Clark Cook, “Faults of Talking Machine as a Musical Educator, Musical America, 5 August 1916, p. 31. 23 “Trade Notes from Cincinnati: An Interesting Chat with Rudolf Wurlitzer Jr.,” Talking Machine World, vol. 2, no. 3 (March 1906), p. 19. 24 “Hard to ‘Pick the Winner,’” Talking Machine World vol. 2 no. 4 [sic! incorrectly numbered 3] (April 1906), p. 30. 25 Quoted in: Mark Katz, Capturing Sound: How Technology Has Changed Music, Rev. ed. (Berkeley: University of California Press, 2010), 59. 26 “Pittsburg’s Budget of News,” Talking Machine World vol.1, no. 11 (Nov. 1905), p. 8. 27 Edward Lyman Bill, Talking Machine World, vol. 1, no. 5 (May 1905), p. 14. 28 Gaisberg, The Music Goes Round, 26. 29 Peter Martland, Since Records Began: Emi, the First 100 Years (London: Batsford, 1997), 44.
  • 44. 30 Jerrold Northrop Moore, A Voice in Time: The Gramophone of Fred Gaisberg, 1873-1951 (London: Hamilton, 1976). 31 Gaisberg, The Music Goes Round, 34. 32 Letter Hawd to Headquarter London, 21 Nov. 1901, EMI Archives. 33 “India a Great Market,” Talking Machine World vol. 1, no. 4 (April 1905), p. 6. 34 Gaisberg, The Music Goes Round, 48-9. 15 For the exclusive use of M. Hu, 2020. This document is authorized for use only by Meiyi Hu in International Business Strategy Winter Semester 2020 taught by ERIC HUTCHINS, California State Polytechnic University - Pomona from Jan 2020 to May 2020. https://www.filmpreservation.org/preserved-films/screening- room/the https://www.youtube.com/watch?v=YBXyuY2J20o
  • 45. 35 40 45 50 55 SCG-557 Gramophone: Reimagining Music Diary entry 1 November 1902, made available: http://www.recordingpioneers.com/docs/GAISBERG_DIARIES_ 2.pdf. 36 Gerry Farrell, Indian Music and the West (Oxford, New York: Oxford University Press, 1997), 117. 37 “Developing Our Export Trade,” Talking Machine World vol. 4, no. 2 (Febr. 1908), p. 18. Quoted in: Karl Hagstrom Miller, "Talking Machine World: Selling the Local in the Global Music Industry, 1900- 1920," in Global History: Interactions between the Universal and the Local, ed. A. G. Hopkins (New York: Palgrave, 2006), 169. 38 Talking Machine World vol. 6, no. 12 (Dec. 1910), p. 49. 39 Letter London Headquarter to Addis, Calcutta, 6 December 1904, EMI Archives. “India a Great Market,” Talking Machine World vol. 1, no. 4
  • 46. (April 1905), p. 6. 41 Gaisberg, The Music Goes Round, 54. 42 Heinrich Bump “Unsere Reise um die Erde. Skizzen von der großen „Beka“-Aufnahmen- Expedition,” Phonographische Zeitschrift 7/28, 1906: 582-602, here: 583-4. 43 Letter Rodkinson, Kolkata to London Headquarter, Dec. 18, 1906, EMI Archives; “Trade News from All Points of the Compass,” Talking Machine World vol. 3, no. 3 (March 1907), p. 37. 44 Letter Kolkata to London Headquarter, June 28, 1906, EMI Archives. Letter London Headquarter to Rodkinson, Kolkata, Nov. 28, 1906, EMI Archives. 46 Talking Machine World vol. 4, no. 2 (Febr. 1908), pp. 18-20. 47 Estimate based on change in consumer price index, see endnote 11. 48 David Suisman, Selling Sounds: The Commercial Revolution in American Music (Cambridge, Mass.: Harvard University Press, 2009), 130. 49 Between $754 million and $1.5 billion in today’s-$; estimate based on change in consumer price index, see endnote 11. Estimate based on change in consumer price index, see endnote 11. 51 Number for 1917. Suisman, Selling, 114. 52 Ibid., 117. For an example, see http://www.loc.gov/jukebox/victor-book-of-the-opera. 53 Campbell J. Gibson and Emily Lennon, “Historical Census Statistics on the Foreign-Born Population of the United States: 1850 TO 1990,” US Bureau of the Census, Population Division Working Paper No. 29, Febr. 1999, https://www.census.gov/population/www/documentation/twps00
  • 47. 29/twps0029.html. 54 https://www1.nyc.gov/assets/planning/download/pdf/data- maps/nyc- population/nny2013/chapter2.pdf “Saturday Night Closing Proves Success in Detroit,” Talking Machine World vol. 9, no. 12 (Dec. 1913), p. 54. 56 Suisman, Selling, 118, 20. 57 Peter Martland, Recording History: The British Record Industry, 1888-1931 (Lanham, Md.: Scarecrow Press, 2013), 199. 58 Ibid., 200. 59 “New York Trade Discusses European War,” Talking Machine World vol. 10, no. 8 (Aug. 1914), p. 24. 16 For the exclusive use of M. Hu, 2020. This document is authorized for use only by Meiyi Hu in International Business Strategy Winter Semester 2020 taught by ERIC HUTCHINS, California State Polytechnic University - Pomona from Jan 2020 to May 2020. https://www1.nyc.gov/assets/planning/download/pdf/data- maps/nyc https://www.census.gov/population/www/documentation/twps00 29/twps0029.html http://www.loc.gov/jukebox/victor-book-of-the-opera http://www.recordingpioneers.com/docs/GAISBERG_DIARIES_ 2.pdf
  • 48. S C G - 5 5 7 N o v e m b e r 5 , 2 0 1 9 C H R I S T I N A L U B I N S K I Historical Entrepreneurship Case Series Gramophone: Reimagining Music We entered a new world of musical and artistic values. One had to erase all memories of the music of European opera-houses and concert- halls: the very
  • 49. foundations of my musical training were undermined.1 --Fred Gaisberg on his experience of recording in India, 1902 T he professional talent scout Fred Gaisberg (see Exhibit 1 for picture) found himself at a loss. He had arrived in Calcutta (Kolkata) at the end of October 1902, to record local artists whose music could be sold on gramophone discs. This was not the first scouting trip for the 29-year old. Gaisberg had worked for his employer, the Anglo-American Gramophone Co., since 1898 and had crisscrossed Europe to detect artistic talents—with enormous success. He proudly reflected on his sessions with the famous tenor Enrico Caruso in Milan, only six short months ago. These recordings not only enhanced Gaisberg's own reputation but also established the gramophone as an important means for spreading art and culture to the masses.2 However, in India, Gaisberg encountered new challenges. The first musicians he recorded were found with the help of two Indian intermediaries from the local theater scene. 3 Yet, Gaisberg had his doubts about the music he heard. Observing one performance at an Indian theater, he noticed: Quite arbitrarily, there was introduced a chorus of young Nautch girls [female Indian performers] […] accompanied by fourteen brass instruments all playing in unison. I had yet to learn that the oriental ear was unappreciative of chords and harmonic treatment and only demanded the rhythmic beat of the accompaniment of the drums. At this point we left.4
  • 50. On the way home, Gaisberg pondered: How was he going to recognize the most promising Indian performers if their music was so hard to understand? How would he ever be able to convince his customers that the gramophone should be considered as a serious musical instrument? And would anyone even like the songs that he was about to preserve for all eternity? For the exclusive use of M. Hu, 2020. This document is authorized for use only by Meiyi Hu in International Business Strategy Winter Semester 2020 taught by ERIC HUTCHINS, California State Polytechnic University - Pomona from Jan 2020 to May 2020.
  • 51. SCG-557 Gramophone: Reimagining Music The Origins of the Gramophone Business The gramophone was a remarkable invention. It was conceived by the serial inventor Thomas Edison, who, in 1877, discovered a way to record sound on tinfoil-coated cylinders. Edison tested the machine by speaking the nursery rhyme “Mary Had a Little Lamb” into the mouthpiece, and was delighted as the machine played his words back to him.5 In his laboratory notebook, he casually jotted down the name “phonograph” for the machine. However, as it turned out, the term phonograph was commonly used as a synonym for “shorthand;” a method of rapid writing with abbreviations and symbols when dictating. Edison and his staff brainstormed alternatives: Should they call the machine Polyphone (manifold sounder)? Cosmophone (universal sounder) or Antiphone (back-talker)? Maybe Chronophone (time-announcer) or Omphlegraph (voice writer)? (For a full list of the names considered, see Exhibit 2 6) In the end, the alternatives were unsatisfactory and Edison received a patent for his “Phonograph or Speaking Machine” on February 19, 1878. Competitors, notably Alexander Graham Bell and Emile Berliner, who further developed the technology of sound reproduction, distinguished their products from Edison’s by
  • 52. using alternative names, such as “gramophone,” “graphophone,” and “talking machine.” Like any good entrepreneur, Edison had great plans for his invention and immediately thought about commercialization. He opined, “I have invented a great many machines, but this is my baby, and I expect it to grow up and support me in my old age.”7 As early as January 1878, he licensed his technology to The Edison Speaking Phonograph Company, which exploited the new machine by exhibiting it. Edison himself received $10,000 for the manufacturing and sales rights and 20% of the profits. However, the machine remained difficult to operate and the recordings etched on tin-foil could only play about two minutes of audio and were ruined after a few uses. Moreover, exhibiting the machine was not going to generate a constant stream of income. What if the novelty wore off? Eager to make his invention a long-term commercial success, Edison sat down and speculated about other lucrative applications.8 He explained that the talking machine “brings its possibilities within the range of the speculative imaginations” but also admitted to being “in a somewhat chaotic condition of mind as to where to draw the dividing line.”9 Working through the mental turmoil, Edison presented a list of the twelve most promising applications for his invention: 1. Letter writing and other forms of dictation 2. Books [i.e. reading of existing books] 3. Educational Purposes 4. Music 5. Family Record 6. Phonographic Books [i.e. newly designed for recordings and
  • 53. to preserve languages] Christina Lubinski, Professor of Clinical Entrepreneurship at the University of Southern California, prepared this case. This case in the Historical Entrepreneurship Case Series was supported by a grant from the Founder Central Initiative. This case was developed from field and archival research. Cases are developed solely as the basis for class discussion and are not intended to serve as endorsements, sources of primary data or illustrations of effective or ineffective management. Copyright © 2019 Lloyd Greif Center for Entrepreneurial Studies, Marshall School of Business, University of Southern California. For information about Greif Center cases, please contact us at [email protected] This publication may not be digitized, photocopied, or otherwise reproduced, posted or transmitted without the permission of The Lloyd Greif Center for Entrepreneurial Studies. 2 For the exclusive use of M. Hu, 2020. This document is authorized for use only by Meiyi Hu in International Business Strategy Winter Semester 2020 taught by ERIC HUTCHINS, California State Polytechnic University - Pomona from Jan 2020 to May 2020. mailto:[email protected]
  • 54. Gramophone: Reimagining Music SCG-557 7. Musical boxes 8. Toys 9. Clocks 10. Advertising 11. Speech and other Utterances 12. Revolutionize the systems of telephone and telegraphy Edison saw by far the greatest potential in the field of office dictations and “the design [of the machine] is made with a view to its utility for that purpose.”10 He reasoned that the phonograph would allow businessmen to dictate from anywhere, keep duplicates as needed, eliminate many of their clerk
  • 55. positions, and improve the privacy of business correspondence (see Exhibit 3 for his own words on the matter). Eventually, he predicted, stenographers would be disposable altogether, when phonographs became so prevalent that businessmen could send each other cylinders with recordings rather than letters. In addition, one may argue that the corporate customers Edison targeted were less likely to shy away from the steep price of the machine ($150 in 1891; approx. $2,780 today.)11 However, it took almost a decade before businessman Jesse H. Lippincott purchased the Edison Phonograph Company as well as technology licenses from some of the other competitors in the industry. By 1888, phonographs were leased as office dictating machines to various companies. However, financial success eluded the entrepreneurial venture. Moreover, not everybody celebrated the arrival of this new technology. The first National Phonograph Association Convention in 1890 addressed the pressing problem of how to overcome opposition from stenographers, who feared that the machine would devalue their skills and bring unemployment (the film The Stenographer’s Friend; or, What Was Accomplished by an Edison Business Phonograph? addressed some of the widely shared concerns12). When Lippincott fell ill, Edison, as the main creditor of the business, tried to continue it but eventually had to declare bankruptcy. From Office to Opera As the dictation business failed, Edison and other pioneering entrepreneurs moved into the entertainment space. Besides Edison’s new company, the
  • 56. “National Phonograph Company,” his main competitors were Edward Easton’s “Columbia Phonograph Company” (founded in 1887) and Emile Berliner’s “United States Gramophone Company” (founded in 1894). While Edison recorded sounds on wax cylinders, Emile Berliner invented the first discs made initially of hard rubber and later shellac. Consumers had to decide for either the cylinder or the disc system, with neither having a strong competitive advantage. Recordings made on cylinder could not be played on disc machines, and vice versa. The first move into the entertainment space was the opening of talking machine parlors (see Exhibit 4) in the 1890s, where customers could listen to a recording in exchange for a nickel. Gaisberg mockingly described these penny arcades: “It was ludicrous in the extreme to see ten people grouped about a phonograph, each with a tube leading from his ears, grinning and laughing at what he heard.”13 It was not surprising that Gaisberg rejected the unsophisticated musical entertainment of the parlors. Growing up in Washington DC, Gaisberg was a born musician. As a young child, he sang in the choir of famous composer and conductor John Philipp Sousa. He also spent years perfecting his piano play. At age sixteen, still in high school, he worked part-time for the Columbia Phonograph Company on recordings of the whistler John York Atlee, who he also accompanied on the piano. When Gaisberg graduated in 1891, he trained with Columbia and became a full- time producer. In 1894, he met Emile 3
  • 57. For the exclusive use of M. Hu, 2020. This document is authorized for use only by Meiyi Hu in International Business Strategy Winter Semester 2020 taught by ERIC HUTCHINS, California State Polytechnic University - Pomona from Jan 2020 to May 2020.
  • 58. SCG-557 Gramophone: Reimagining Music Berliner, the inventor of the disc, and started working for him. His tasks included scouting for talent, playing accompaniments, and washing up the acid tanks.14 He learned the business inside and out. The accomplished musician Gaisberg was not alone in objecting to the “nickel-in-the-slot” machines. The trade journal Talking Machine World reported in 1905, “One of the main obstacles to the introduction of the graphophone into many homes is, no doubt, the popular impression that the talking machine in still only a scientific toy.”15 The penny arcades were fine to earn a few nickels but they cashed in on the novelty of the technology and the curiosity and amazement of the customers. The burning question, however, was how to generate a consistent stream of income. The answer of the US manufacturers was to go after “high- cultured” customers, who they assumed could learn to appreciate the gramophone not for its novelty but for its ability to bring artful music to their living rooms. Repositioning the gramophone as a serious musical instrument was not an easy task. Manufacturers and dealers started by defining the piano and the violin as the gramophone’s left and right competitors. C. V. Henkel of the Douglas Phonograph Co. stressed the “absolute perfection in sound reproduction” and asked pointedly: “Can you name any musical instrument that can compare with the incomparable talking machine?”16 Stores received a make-over to resemble the most elegant piano showrooms,17 and furniture makers designed beautiful
  • 59. high-class cabinets for the gramophones to fit them into the living rooms of the upper classes.18 When well-respected piano dealers, such as Barnett, Samuel & Sons, added talking machine departments to their stores, the industry breathed a little easier.19 A trade journal reported, not without pride, about one piano dealer who admitted that he used to consider talking machines “beneath my dignity” but now saw them as “cultivating a latent love for music among the masses, which in time will create a demand for musical instruments of every description.”20 Unfortunately for the industry, critics of the gramophone were also numerous and vocal. Some criticized the poor quality of the recordings or the fact that both Edison’s cylinders and Berliner’s discs could only play two to three minutes of audio, while musical live performances at the time often lasted for hours. Indeed, professional producers, like Gaisberg, had to cut up longer performances and even reduced the lengths of a song to fit the new medium. Some artists objected to the fact that the recordings eliminated the important interaction between the performer and the audience, and isolated the music lover who now enjoyed the music alone, rather than in the company of family and friends. Others feared for the effect of the gramophone on American culture. John Philip Sousa, Gaisberg’s early teacher, ranted against the gramophones, which “sing for us a song or play for us a piano, in substitute for human skill, intelligence, and soul.” He foresaw “a marked deterioration in American music and musical taste, an interruption in the musical development of the country, and a host of other
  • 60. injuries to music in its artistic manifestation, by virtue—or rather by vice—of the multiplication of the various music-reproducing machines.”21 Alice Clark Cook, a writer for the classical music magazine Musical America, vexed: “As a diet of canned foods […] injures taste and digestion, so does a diet of ‘canned’ music lead to the destruction of individual taste, to indifference and loss of appetite.”22 To counter such claims, manufacturers moved even more decidedly into the field of “serious” artful music (e.g., classical music and opera) and engaged in marketing campaigns highlighting the gramophone’s role in promoting the arts, not destroying them. Manufacturers also invested in specialized education departments to stress the gramophone’s use as an educational tool for the promotion of classical music in schools and universities. Rudolph Wurlitzer Jr. of the eponymous company argued that the talking machine “offers to persons who have neither means to attend concerts of good music, nor ability to play upon an instrument, the opportunity to become familiarized with high-class selections and the personal interpretations of the best instrumental and vocal artists.”23 4 For the exclusive use of M. Hu, 2020. This document is authorized for use only by Meiyi Hu in International Business Strategy Winter Semester 2020 taught by ERIC HUTCHINS, California State Polytechnic University - Pomona from Jan 2020 to May 2020.
  • 61. https://easier.19 https://classes.18 https://tanks.14 Gramophone: Reimagining Music SCG-557 Similarly, John Prescott of the American Record Co. expressed his belief that “the talking machine is becoming more and more an important factor in educating the
  • 62. public taste.”24 By the beginning of the twentieth century, the talking machine was inextricably intertwined with education and high culture. A journalist of National Music Monthly argued that opera had increased in popularity because of the influence of the gramophone: “People have heard in their own homes beautiful excerpts from the greatest operas, and have come to know their meaning.”25 An observer in Pittsburg found that, “The talking machine in its earlier stage was regarded more or less as a toy and people of culture and refinement refused to buy them. […] [T]hese objections have been swept aside and as a result we see among the buyers […] some of the best and most cultured people of the city.”26 Edward Lyman Bill, the editor of Talking Machine World, even made a claim to the gramophone’s ability to bring culture to the entire world: “Every nation should strive to cultivate the art instinct […] it is through the talking machine that millions of people in all lands are enabled to hear the music of the world’s greatest artists.”27 Into the Unknown Inspired by such missionary zeal, it is not surprising that an ever-growing number of gramophone manufacturers competed not just in the US but also in foreign markets. Fred Gaisberg’s employer, the Gramophone Co., was early in targeting foreign markets all around the world. The company was founded in 1898 in London, England, on behalf of Emile Berliner. That same year, Gaisberg moved from the US to London to set up the first recording studio in Europe and started his long and successful
  • 63. career as a record producer. Shortly thereafter, in November 1899, the Gramophone Co. acquired the famous trademark “His Master’s Voice,” displaying the fox terrier Nipper listening to a gramophone. Gaisberg went on a series of recording tours to expand the portfolio of the Gramophone Company. He started with a European tour covering Leipzig, Vienna, Budapest, Milan, Paris and Madrid in the summer of 1899. Gaisberg remembered: “This expedition gave me vast experience in recording under various conditions and produced a rich harvest of musical records, both exciting and delightful to my provincial mind.” 28 The results were so promising that Gaisberg’s manager sent him almost immediately on a second tour across the British Isles with his companion William Sinkler Darby. The two young engineers were regarded as elite employees with special skills. Within the company, they were known as “the experts” or “the boys,” partly because of their young age and partly because of their pleasure-seeking lifestyle during travels.29 In February 1900, Gaisberg embarked upon a major Russia tour, where he recorded for a full six months.30 “I had seen opera performances on a scale unbelievably lavish,” Gaisberg noted after the trip. “I had heard and negotiated with a bevy of the greatest and perhaps most spoiled artists of that epoch.”31 Another opportunity awaited them: India. In India, English and Indian musical instrument dealers began to see talking machines emerge as a high potential line of business, although they struggled with adequately serving a market that was spread out over such a vast territory. In July 1901, Gramophone Co. sent his agent, John Watson Hawd, to Calcutta to
  • 64. investigate the emerging opportunity. Hawd traveled widely in India and concluded: “I think we shall do a fair business here if we only have the goods, but until we get native records we shall only be able to sell to Europeans and they are only 1 per 100 natives.”32 Being on the ground, it became clear to Hawd that the recordings made in Europe and the US would not sell in India. Other traveling agents and scouts confirmed that “American records are absolutely unknown” and “[o]rchestral records are also little in demand.”33 Moreover, the many different languages and dialects spoken in India and the religious diversity made this a challenging music market. Different groups of people wanted different music. Hawd was relentless in telling his superiors: “You must however send one man to make records.” Not surprisingly, 5 For the exclusive use of M. Hu, 2020. This document is authorized for use only by Meiyi Hu in International Business Strategy Winter Semester 2020 taught by ERIC HUTCHINS, California State Polytechnic University - Pomona from Jan 2020 to May 2020. https://months.30 https://travels.29
  • 65. SCG-557 Gramophone: Reimagining Music the Gramophone Co. selected Fred Gaisberg, their most experienced scout. He was accompanied by his 19-year-old assistant George Dillnutt, the businessman Thomas Dowe Addis and Addis’ wife. According to Gaisberg, the aim of this trip was “to open up new markets, establish agencies, and acquire a catalogue of native records. [...] As we steamed down the channel into the unknown I felt like Marco Polo starting out on his journeys.”34
  • 66. However, making local recordings proved more difficult than anyone had anticipated. Upon arrival in Calcutta, Gaisberg first struggled to get his luggage with the recording equipment cleared at customs. After a total of five days of waiting, he declared happily: “Today we at last succeeded in getting our stuff out of the Custom House.”35 It took another week before they had identified the first artists and Gaisberg noted that the first recordings made on November 8, were of two nautch girls “with miserable voices.”36 The accomplished piano player Gaisberg had a hard time making sense of the Indian music. A perfectionist, Gaisberg wanted all recordings to be flawless because unlike live performances, they were supposed to last. However, it was difficult for him to evaluate the Indian performances. Edward Burns, manager of the Columbia export department, confirmed that the talent scouts traveling around were generally “strangers in the countries to which they may be despatched [sic], knowing little, if anything, of the language and customs of the people and ignorant of the material from which to choose suitable recording-making talent.”37 The result was a hodgepodge of questionable material. After their first six-week stay, Gaisberg and his crew went home with over 500 masters, of which records were manufactured in Europe and shipped to India in April 1903. Other companies followed their example and recorded local artists all over the Indian subcontinent. In lieu of any deeper understanding of the music, they relied on easily observables proxies, most importantly language variety. Recording engineers sent detailed reports on the different dialects and languages spoken in all parts of the world.38 The
  • 67. Gramophone Co. instructed its local agent in India to extend the catalogue by 2,500 records in order to cover the twelve languages that were considered most popular.39 The lack of instructions towards musical genre or style mirrors the failure to understand the local music; however, the decision to provide music in a variety of languages was a first step toward diversifying the portfolio. Unexpectedly for many of the scouts, quite a few of these Indian recordings turned out to be very successful. “To be sure the selections are weird,” argued one recording engineer about his activities in India, “but they sell like hot cakes.” Following a market rather than an art logic, this recording engineer was optimistic about the future: “It may appear queer, but India is the best place on earth for talking machines. The masters must be made on the spot, and be native music … but India … appears to me a great field for American enterprise in this line.”40 Reliable local middlemen could have been extremely valuable in this context, but they were also rare and highly sought after in the competitive Indian market. Gaisberg first turned to the English agents living in India but was disappointed: “They could be living on another planet for all the interest they took in Indian music.”41 A German competitor, Beka Records, attempted to collaborate with locals in Calcutta. Heinrich Bump, owner of the company and lead recording scout, asked a partner in Bombay to introduce him to a friend in Calcutta. However, that friend was unable to accommodate them and instead referred them to a pal, who again passed their wishes on to another associate. The latter was supposed to engage the right artists and attend the recording
  • 68. sessions to guarantee that performers sing the right pieces in the pre-selected languages. However, the lengthy negotiations between the partners yielded few results, and eventually Bump felt that he was being taken advantage of.42 Both the Gramophone Co. and Beka worked with an Indian trading company, Valabhdas Lakhmidas and Co. with great experience in record sales. Because their services were so valuable, Beka offered Valabhdas favorable contract conditions, sending large quantities of goods on consignment and 6 For the exclusive use of M. Hu, 2020. This document is authorized for use only by Meiyi Hu in International Business Strategy Winter Semester 2020 taught by ERIC HUTCHINS, California State Polytechnic University - Pomona from Jan 2020 to May 2020. https://popular.39 https://world.38
  • 69. Gramophone: Reimagining Music SCG-557 imposing no minimum sales. Gramophone Co. feared that this practice put them at a disadvantage to Beka, and the Germans indeed managed to complete 1,000 Indian records with the help of their local partner.43 Eventually, Valabhdas and Beka entered an exclusive agreement. In addition to the musical artists that Valabhdas selected, they also recorded political speeches and patriotic songs, which became very popular in the context of an anti-colonial protest movement in 1906. Gramophone Co. considered the competition inferior: “The ‘Beka’ Records (Native) are . . . poor stuff. No class whatever, and not to be compared with our Records.”44 However, they sold well and Gramophone Co. debated the option of reissuing records that had been withdrawn from the catalogue at a cheaper price “as a measure for the destruction of the Beka Agency.”45
  • 70. Over time, the internationalization departments became better at identifying characteristics of foreign music outside of language. Edward Burns of the Columbia export department stressed how he and his colleagues studied migration patterns of different ethnic groups, the musical tastes of different social classes and religions, and even color preferences for designing labels. They discovered that in several foreign countries, where ancestors were particularly worshiped, hearing and possibly preserving “the voice of some dead and gone patriarch of the family” was a major selling point for the gramophone. Columbia even developed a new diaphragm for the recordings abroad. US artists, Burns argued, are “trained, so that high notes are taken by gradation, and they are familiar with the surroundings and apparatus in the laboratory.” However, in the East, he found “voices are explosive, and the diaphragm ‘blasts’,” which made a change in the equipment necessary to better “absorb these sharp inequalities of sound.”46 Based on the experiences with his customers abroad, Burns established three categories of records: (i) native or popular air or monologues, (ii) folk and standard native songs, and (iii) high culture and opera music in foreign languages. Many employees of US gramophone companies traveled abroad to gain first-hand experiences or familiarized themselves with foreign music from the export departments of their respective companies. Continuous travels and learning by trial-and-error helped the gramophone companies to develop more sophisticated strategies for their export markets. The Big Three in the US In the meantime, the US market matured. The “big three”
  • 71. (Columbia, Edison, and Berliner) were locked in an intense commercial rivalry, aggravated by lawsuits about patents and the system competition between Edison’s cylinder and Berliner’s disc- format (while Columbia dealt in both.) Production figures (see Exhibit 5) reveal that from 1899 to 1901, the US industry went through a slump due to intense rivalry, bitter recrimination and costly litigation. In 1901, Emile Berliner withdrew from his business due to this legal dispute and sold his patents and rights to Eldridge Reeves Johnson, an individual who made early contributor to the technological and production side of the business, but lacked significant experience in music. Johnson launched a new company, the Victor Talking Machine Company, in 1901 and signed a multipart commercial agreement with the internationally successful Gramophone Co., including a non-compete agreement and the sharing of trademarks and research and development. The industry was now a patent-based oligopoly and the new big three (Columbia, Edison, and Johnson) would keep a virtual stranglehold on the US industry until 1921. Fighting the prejudices against “canned” mechanical music, US manufacturers established an expensive star cult centered on high-class and high-culture professional musicians. Male tenors were particularly sought after because early sound recording technology had problems capturing high-end and low-end sounds. This not only led some bands to replace drums with cowbells, but also meant that female voices and high-pitched instruments, such as violins, recorded rather poorly. Male tenors by
  • 72. contrast could be captured particularly well. Gaisberg recorded Fyodor Chaliapin and other members of the Imperial Opera in Saint Petersburg as well as world- famous tenor Enrico Caruso in Milan, whose records were labeled with a red seal to mark the distinct category. These records were also used by many 7 For the exclusive use of M. Hu, 2020. This document is authorized for use only by Meiyi Hu in International Business Strategy Winter Semester 2020 taught by ERIC HUTCHINS, California State Polytechnic University - Pomona from Jan 2020 to May 2020. https://partner.43
  • 73. SCG-557 Gramophone: Reimagining Music aspiring artists who could now practice their own playing based on recordings of a well-established performer. These Red Seal labels became popular in the high- brow culture of the US and cemented Victor’s position in the industry (see Exhibit 6 for sales numbers.) Caruso and a few other superstar artists received sizeable financial rewards for their efforts. From mid-1915 to mid-1916, Caruso earned more than $78,000 ($1.96 million in 2019 dollars 47) in royalties from his recordings in the US.48 The marketing strategy that supported the focus on high-brow music required continuous investment. Victor spent $52.7 million49 on advertising from 1901 to 1929, averaging 8.24 percent of the company’s annual expenditures, which made Victor one of the most prodigious and best-known advertisers in the world. In 1912 alone, the company allotted more than $1.5 million 50 ($39.1 million in 2019 dollars) for advertising. By the mid-1910s, Victor was one of the top five magazine advertisers in the US, although in terms of assets it ranked as only the
  • 74. 174th-largest company.51 Victor also invested heavily in other promotional material, such as record and phonograph catalogues as well as specialized publications, such as the Victor Book of the Opera, a hardcover book containing illustrated descriptions of opera plots, translations of arias and integrated listings of Victor opera records.52 The opera had a devoted following among the social elites but was also, occasionally, of interest to popular audiences, sometimes in adapted and modified forms. Even in the immigrant communities in large US cities, people enjoyed opera performances from their home countries. In 1910, 14.7 percent of the overall US population were foreign-born.53 In New York City, a staggering 40.8 percent of the population were first generation immigrants (compared to 18 percent in the 1970s and 37 percent in 2019). In other large cities, such as Boston (36 percent), Detroit (33.5 percent), Chicago (28.7 percent) and Philadelphia (25 percent), the immigrant population made up a significant part of the inhabitants.54 In the immigrant neighborhoods, one could even find small dealers specializing in records of a particular language group and refusing to carry anything else.55 The Victor (and Gramophone Co.) trademark “His Master’s Voice” became an iconic household name. Starting in 1906, the campaign was showcased on a heavily illuminated sign on Herald Square in New York City above the legend “The Opera at Home.” In this ad, Nipper, the dog, stood 25 feet high and was seen by an estimated 800,000 people daily. The advertisement was purportedly the most expensive in the world at that time.56
  • 75. What’s Next? When World War I broke out on July 28, 1914, all experts in the industry were stunned. This was the first general war between the European powers since the defeat of Napoleon in 1815. It ended a long period of relative stability and great economic integration. Like many observers, the gramophone executives were taken by surprise at the suddenness of the war crisis. The chairman of the Gramophone Co. Trevor Williams noted: “When the war burst upon us … we, with the rest of civilization, were quite unprepared for such a contingency.”57 The shock of the war caused panic among buyers. Consumers’ first reaction was to postpone the purchase of luxury and entertainment goods, like records and gramophones. A week after the war in Europe broke out, Alfred Clark of the Gramophone Co. wrote to Eldridge Johnson in the US: “There is no business, and it would be foolish to attempt to do any.”58 The nations at war included all of their colonies and dependent territories in their war efforts. India, for example, followed Great Britain and declared war on Germany in September 1914. A US trade journal observed that in the highly integrated world economy, “[A]ll of the manufacturers have European factories and branches, which will necessarily suffer materially from the effects of the war.” Shipping product from US factories to Europe was also not an option because there was “no demand for talking machines and records in Europe” and “foreign shipping has practically ceased.”59 Debates began: Where should the industry turn now?
  • 76. 8 For the exclusive use of M. Hu, 2020. This document is authorized for use only by Meiyi Hu in International Business Strategy Winter Semester 2020 taught by ERIC HUTCHINS, California State Polytechnic University - Pomona from Jan 2020 to May 2020. https://inhabitants.54 https://foreign-born.53 https://records.52 https://company.51 Gramophone: Reimagining Music SCG-557 Exhibit 1: Frederick William Gaisberg (1 January 1873 – 2 September 1951) Gaisberg (l) with Sir Edward Elgar and Yehudi Menuhin outside the EMI Abbey Road studios after the recording of Elgar's Violin Concerto in 1932. Source: Wikipedia; Under Fair Use.
  • 77. 9 For the exclusive use of M. Hu, 2020. This document is authorized for use only by Meiyi Hu in International Business Strategy Winter Semester 2020 taught by ERIC HUTCHINS, California State Polytechnic University - Pomona from Jan 2020 to May 2020. SCG-557 Gramophone: Reimagining Music Exhibit 2: List of Names for the Talking Machine, 1877 10 For the exclusive use of M. Hu, 2020. This document is authorized for use only by Meiyi Hu in International Business Strategy Winter Semester 2020 taught by ERIC HUTCHINS, California State Polytechnic University - Pomona from Jan 2020 to May 2020.
  • 78. Gramophone: Reimagining Music SCG-557 Exhibit 2: List of Names for the Talking M achine, 1877,
  • 79. continued Auto-Electrograph = Electric Pen Tel-autograph Tel-autophone Polyphone = Manifold Sounder Autophone = Self sounder Kosmophone = Universal Sounder Acoustophone = Sound hearer = Audible speaker Octophone = Ear-sounder = speaker Anitphone = Back-talker Liguphone = Clear speaker Minuttophone = Minute-sounder Meistophone = Smallest sounder Anchiphone = Near sounder or speaker Palmatophone = Vibration sounder Chronophone = Time-announcer = Speaking clock Didaskophone = Teaching speaker, Portable teacher Glottophone = Language sounder or speaker Climatophone = Weather announcer Atmophone = Fog sounder or Vapor- speaker Palmophone = Pendulum sounder or Sounding pendulum Pinakophone = Sound Register Hemerologophone = Speaking almanac Kalendophone = Speaking Calendar Sphygmophone = Pulse speaker Halmophone = Heart-beat sounder Seismophone = Earthquake sounder Electrophone = Electric speaker
  • 80. Brontophone = Thunder speaker Klangophone = Bird-cry sounder Surigmophone = Whistling sounder Bremophone = Wind sounder Bittakophone = Parrot speaker Krogmophone = Croaking or Cawing sounder Hulagmophone = Barking sounder Trematophone = Sound borer Telephemist telephemy telepheme Electrophemist electrophemy electropheme Phemegraph = speech writer Omphegraph -gram = voice writer or researcher Melodograph Melograph Melpograph - gram = song writer Epograph = speech writer, lecture or sermon Rhetograph = speech writer Kinemograph = motion writer Atmophone = vapor or steam sound Aerophone = air sound Symphraxometer = pressure measurer Synothemeter = pressure measurer Orcheograph = vibration record Orcheometer Source: 1877 [Supplied year] -- Lists and Inventories/Cylinder phonograph [D7702] Document File Series -- 1877: (D-77-02) Edison, T.A. – General [D7702ZEO; TAEM 14:242]. Courtesy of Thomas Edison National Historical Park. 11
  • 81. For the exclusive use of M. Hu, 2020. This document is authorized for use only by Meiyi Hu in International Business Strategy Winter Semester 2020 taught by ERIC HUTCHINS, California State Polytechnic University - Pomona from Jan 2020 to May 2020. SCG-557 Gramophone: Reimagining Music
  • 82. Exhibit 3: Selected Excerpts from “The Phonograph and Its Future” by Thomas Edison Among the more important [applications for the phonograph] may be mentioned: Letter-writing, and other forms of dictation books, education, reader, music, family record; and such electrotype applications as books, musical-boxes, toys, clocks, advertising and signaling apparatus, speeches, etc., etc. Letter-writing: The apparatus now being perfected in mechanical detail will be the standard phonograph, and may be used for all purposes, except such as require special form of matrix, such as toys, clocks, etc., for an indefinite repetition of the same thing. The main utility of the phonograph, however, being for the purpose of letter writing and other forms of dictation, the design is made with a view to its utility for that purpose. … [I]t is desirable to have but one class of machine throughout the world. …The practical application of this form of phonograph for communications is very simple. A sheet of foil is placed in the phonograph, the clock-work set in motion, and the matter dictated into the mouth-piece without other effort than when dictating to a stenographer. It is then removed, placed in a suitable form of envelope, and sent through the ordinary channels to the correspondent for whom designed. He, placing it upon his phonograph, starts his clock- work and listens to what his correspondent has to say. Inasmuch as it gives the tone of voice of his correspondent, it is identified. As
  • 83. it may be filed away as other letters, and at any subsequent time reproduced, it is a perfect record. As two sheets of foil have been indented with the same facility as a single sheet, the “writer” may thus keep a duplicate of his communication. As the principal of a business house, or his partners now dictate the important business communications to clerks, to be written out, they are required to do no more by the phonographic method, and do thereby dispense with the clerk, and maintain perfect privacy in their communications. The phonograph letters may be dictated at home, or in the office of a friend, the presence of a stenographer not being required. The dictation may be as rapid as the thoughts can be formed, or the lips utter them. The recipient may listen to his letters being read at a rate of from 150 to 200 words per minute, and at the same time busy himself about other matters. Injections, explanations, emphasis, exclamations, etc., may be thrown into such letters, ad libitum. In the early days of the phonograph, ere it has become universally adopted, a correspondent in Hong-Kong may possibly not be supplied with an apparatus, thus necessitating a written letter of the old-fashioned sort. In that case the writer would use his phonograph simply as a dictating-machine, his clerk writing it out from the phonograph at leisure, causing as many words to be uttered at one time as his memory was capable of retaining until he had written them down. This clerk need not be a stenographer, nor need he have been present when the letter was dictated, etc. The advantages of such an innovation upon the present slow,
  • 84. tedious, and costly methods are too numerous, and too readily suggest themselves, to warrant their enumeration, while there are no disadvantages which will not disappear coincident with the general introduction of the new method. Dictation: All kinds and manners of dictation which will permit of the application of the mouth of the speaker to the mouth-piece of the phonograph may be as readily effected by the phonograph as in the case of letters. … It would be even worth while to compel witnesses in court to speak directly into the phonograph, in order to thus obtain an unimpeachable record of their testimony. Source: T. A. Edison, 'The Phonograph and Its Future', North American Review, 126, Jan/Jun (1878), 527-536. 12 For the exclusive use of M. Hu, 2020. This document is authorized for use only by Meiyi Hu in International Business Strategy Winter Semester 2020 taught by ERIC HUTCHINS, California State Polytechnic University - Pomona from Jan 2020 to May 2020.
  • 85. Gramophone: Reimagining Music SCG-557 Exhibit 4: Talking Machine Parlor Source: Phonograph Arcade, Patrons Listening to Phonographs Through Ear Tubes; undated, circa mid-1890s, https://mediatedsignals.com/tag/cylinders/. 13 For the exclusive use of M. Hu, 2020. This document is authorized for use only by Meiyi Hu in International Business Strategy Winter Semester 2020 taught by ERIC HUTCHINS, California State Polytechnic University - Pomona from Jan 2020 to May 2020. https://mediatedsignals.com/tag/cylinders Exhibit 6: Sales of the Victor Talking M achine Company,
  • 86. 1901-1913 SCG-557 Gramophone: Reimagining Music Exhibit 5: US Production Figures for Edison and Berliner/Johnson, 1893-1903 YEAR EDISON BERLINER/ EDISON BERLINER MACHINE JOHNSON RECORDS RECORDS MACHINE (CYLINDER) (DISCS) 27,000 100,000 248,652 713,753 569,154 255,784 256,908 1,696,296 1,966,036 MACHINES 1893-95 NA 1,000 NA 1896 1,239 NA NA 1897 5,167 12,420 87,690 1898 14,255 10,651 428,310 1899 46,097 14,348 1,886,137 1900 41,894 3,054 2,080,132 1901 41,381 7,570 1,976,645
  • 87. 1902 80,257 42,110 4,382,802 1903 113,151 46,601 7,663,142 Source: Martland, Recording History, p. 27. YEAR RECORDS 1901-02 1902-03 1903-04 1904-05 1905-06 1906-07 1907-08 1908-09 1909-10 1910-11 1911-12 1912-13 Source: Martland, Recording History, p. 114. 256,908 42,110 1,696,296 40,601 1,966,036 47,074 2,595,011 65,591 3,565,679 82,589 7,051,775 107,432 5,248,147 50,732 4,639,463 68,231 5,988,004 94,666 6,205,929 124,927 9,150,374 206,798 11,086,489 251,909 14
  • 88. For the exclusive use of M. Hu, 2020. This document is authorized for use only by Meiyi Hu in International Business Strategy Winter Semester 2020 taught by ERIC HUTCHINS, California State Polytechnic University - Pomona from Jan 2020 to May 2020. Gramophone: Reimagining Music SCG-557 1 Frederick William Gaisberg, The Music Goes Round (New
  • 89. York: The Macmillan Company, 1942), 54. 2 Peter Martland, "Gaisberg, Frederick William (1873–1951)," in Oxford Dictionary of National Biography (Oxford: Oxford University Press, 2004). 3 Michael S. Kinnear, The Gramophone Company's First Indian Recordings, 1899-1908 (Bombay: Popular Prakashan, 1994). 4 Gaisberg, The Music Goes Round, 55. 5 A copy of this original Edison recording is available here: https://www.youtube.com/watch?v=YBXyuY2J20o. 6 Thomas Edison National Historical Park, Lists and Inventories, Cylinder phonograph, [D7702] Document File Series -- 1877: (D-77-02) Edison, T.A. – General [D7702ZEO; TAEM 14:242]. 7 Daily Graphic, 2 April 1878. Quoted in: Sarah Knowles Bolton, How Success Is Won (Boston: D. Lothrop, 1885), 189. 8 Thomas A. Edison, "The Phonograph and Its Future," North American Review 126, no. Jan/Jun (1878). 9 Ibid., 527. 10 Ibid., 531. 11 Estimate obtained by multiplying $100 by the percentage increase in the CPI from 1891 to 2017. 12 1910; video available here: https://www.filmpreservation.org/preserved-films/screening- room/the- stenographer-s-friend-1910. 13 Gaisberg, The Music Goes Round, 5. 14 Richard James Burgess, The History of Music Production (New York: Oxford University Press, 2014), 13-4. 15 H. Shanley Jones, “Will Replace Cheap Piano: This is the Mission of the Talking Machine” Talking Machine World vol. 1, no. 3 (March 1905), p. 9. 16 Quoted in: “Timely Talks on Timely Topics,” Talking
  • 90. Machine World vol. 2, no. 2 (Feb. 1906), p. 11. 17 “Interior View of Douglas Phonograph Co.’s Handsome Store,” Talking Machine World vol. 2, no. 2 (Feb. 1906), p. 15. 18 Ad by Herzog Art Furniture Co. in Talking Machine World, vol. 1, no. 4 (April 1905), p. 8; “Trade Notes from Cincinnati, O.,”, Talking Machine World vol. 2, no. 3 (April 1906), p. 5. 19 Note, in: Talking Machine World vol. 1, no. 1 (Jan. 1905), p. 15. 20 “Piano Dealer Gets Wise,” Talking Machine World vol. 2, no. 3 (March 1905), p. 3. 21 John Philip Sousa, "The Menace of Mechanical Music," Appleton's Magazine 8, no. 3 (1906). 22 Alice Clark Cook, “Faults of Talking Machine as a Musical Educator, Musical America, 5 August 1916, p. 31. 23 “Trade Notes from Cincinnati: An Interesting Chat with Rudolf Wurlitzer Jr.,” Talking Machine World, vol. 2, no. 3 (March 1906), p. 19. 24 “Hard to ‘Pick the Winner,’” Talking Machine World vol. 2 no. 4 [sic! incorrectly numbered 3] (April 1906), p. 30. 25 Quoted in: Mark Katz, Capturing Sound: How Technology Has Changed Music, Rev. ed. (Berkeley: University of California Press, 2010), 59. 26 “Pittsburg’s Budget of News,” Talking Machine World vol.1, no. 11 (Nov. 1905), p. 8. 27 Edward Lyman Bill, Talking Machine World, vol. 1, no. 5 (May 1905), p. 14. 28 Gaisberg, The Music Goes Round, 26. 29 Peter Martland, Since Records Began: Emi, the First 100 Years (London: Batsford, 1997), 44. 30 Jerrold Northrop Moore, A Voice in Time: The Gramophone of Fred Gaisberg, 1873-1951 (London: Hamilton, 1976).
  • 91. 31 Gaisberg, The Music Goes Round, 34. 32 Letter Hawd to Headquarter London, 21 Nov. 1901, EMI Archives. 33 “India a Great Market,” Talking Machine World vol. 1, no. 4 (April 1905), p. 6. 34 Gaisberg, The Music Goes Round, 48-9. 15 For the exclusive use of M. Hu, 2020. This document is authorized for use only by Meiyi Hu in International Business Strategy Winter Semester 2020 taught by ERIC HUTCHINS, California State Polytechnic University - Pomona from Jan 2020 to May 2020. https://www.filmpreservation.org/preserved-films/screening- room/the https://www.youtube.com/watch?v=YBXyuY2J20o
  • 92. 35 40 45 50 55 SCG-557 Gramophone: Reimagining Music Diary entry 1 November 1902, made available: http://www.recordingpioneers.com/docs/GAISBERG_DIARIES_ 2.pdf. 36 Gerry Farrell, Indian Music and the West (Oxford, New York: Oxford University Press, 1997), 117. 37 “Developing Our Export Trade,” Talking Machine World vol. 4, no. 2 (Febr. 1908), p. 18. Quoted in: Karl Hagstrom Miller, "Talking Machine World: Selling the Local in the Global Music Industry, 1900- 1920," in Global History: Interactions between the Universal and the Local, ed. A. G. Hopkins (New York: Palgrave, 2006), 169. 38 Talking Machine World vol. 6, no. 12 (Dec. 1910), p. 49. 39 Letter London Headquarter to Addis, Calcutta, 6 December 1904, EMI Archives. “India a Great Market,” Talking Machine World vol. 1, no. 4 (April 1905), p. 6. 41 Gaisberg, The Music Goes Round, 54. 42 Heinrich Bump “Unsere Reise um die Erde. Skizzen von der
  • 93. großen „Beka“-Aufnahmen- Expedition,” Phonographische Zeitschrift 7/28, 1906: 582-602, here: 583-4. 43 Letter Rodkinson, Kolkata to London Headquarter, Dec. 18, 1906, EMI Archives; “Trade News from All Points of the Compass,” Talking Machine World vol. 3, no. 3 (March 1907), p. 37. 44 Letter Kolkata to London Headquarter, June 28, 1906, EMI Archives. Letter London Headquarter to Rodkinson, Kolkata, Nov. 28, 1906, EMI Archives. 46 Talking Machine World vol. 4, no. 2 (Febr. 1908), pp. 18-20. 47 Estimate based on change in consumer price index, see endnote 11. 48 David Suisman, Selling Sounds: The Commercial Revolution in American Music (Cambridge, Mass.: Harvard University Press, 2009), 130. 49 Between $754 million and $1.5 billion in today’s-$; estimate based on change in consumer price index, see endnote 11. Estimate based on change in consumer price index, see endnote 11. 51 Number for 1917. Suisman, Selling, 114. 52 Ibid., 117. For an example, see http://www.loc.gov/jukebox/victor-book-of-the-opera. 53 Campbell J. Gibson and Emily Lennon, “Historical Census Statistics on the Foreign-Born Population of the United States: 1850 TO 1990,” US Bureau of the Census, Population Division Working Paper No. 29, Febr. 1999, https://www.census.gov/population/www/documentation/twps00 29/twps0029.html. 54 https://www1.nyc.gov/assets/planning/download/pdf/data- maps/nyc-