The sound recording industry has evolved from Thomas Edison's phonograph in the 1870s to today's digital music market, with major developments including the impact of radio in the 1920s, the rise of the record industry in the post-WWII era, and more recently the transition to digital formats and services. The industry is dominated by a handful of large companies and follows a standard model with departments for talent acquisition, production, distribution, promotion and other functions. New business models have also emerged like licensing music for use in other media and 360 deals that provide a percentage of artists' total revenue.

1. Sound recording
Chapter 9

2. A brief history
• Phonograph: invented by Thomas Edison in 1877,
originally conceived as a spoken word/ dictation
device. Used a cylinder instead of disc.
• Graphophone: had a better amplification device
• Gramophone: used a disc, introduced the
concept of a record. These were eventually used
for music, not spoken word, and the recording
industry was born

4. The impact of radio
• By the end of 1924, the sales of record
players dropped by 50%
• RCA merged with Victor in 1927
• How did the Victrola get its name?

5. The Depression years
• Thomas Edison's recording
company went out of
business in 1930
• Record sales dropped $46M
in 1930 to $5.5M in 1933
• However, coin operated
jukeboxes began to appear
in the new bars that
emerged post-Prohibition
• By 1939, sales increased by
more than 500%

6. Post WWII
• Radio was utilized as a promotional tool for record labels
• If songs were played
on the radio, it helped
to sell records
• Labels would send
free music to the DJs
at radio stations

7. Post WWII
• Three competing formats for
records post WWII: 33 1/3,
45, 78
• 33 dominated albums, 45 for
singles
• The advent of television
changed radio in that it
made the industry
experiment with music
formats

8. The coming of rock
and roll
• July 1955 Bill Haley and the Comets released
"Rock Around the Clock"
• The following year Elvis puts out his first
single "Heartbreak Hotel"
• Popular in this era of early rock and roll:
Jerry Lee Lewis, Little Richard and
Chuck Berry

9. The commercialization
of rock
• Through a bizarre series of
events, the early rock pioneers
were out of the picture by 1959
(Elvis was in the Army, Little
Richard was in the seminary,
Chuck Berry was incarcerated
in federal prison, Jerry Lee
Lewis married his 13-year-old
cousin)
• Rock and roll was experiencing
an image problem: now, new
artists we're "squeaky clean"
e.g. Ricky Nelson,
The Four Seasons, Bobby Vee,
Connie Francis, Brenda Lee

10. The British Invasion
• In 1964 the Beatles took the US by storm
• The British Invasion
changed the shape of
the music business
and American
popular culture

11. British Invasion
• Most of the BI acts mimicked
what was popular in
American music at the time
(cheerful, commercial and
white)
• Herman's Hermits,
Dave Clark Five
• A less cheerful/pop British
Invasion was taking place
with bands like the Animals
and the Rolling Stones

12. Industry Trends 1970s
– 1990s
• Recording industry boomed
in the 1970s in part to disco
• Early 80s downturn reversed
itself in the late 80s, due in
part to big albums like
Michael Jackson’s Thriller
• CD replaced tape as the
preferred playback medium;
CDs have a bigger profit
margin than tape

13. The contemporary sound
recording industry
• The biggest development in
the past decade is the
emergence of MP3s and MP3
players (iPod)
• The decline of physical media
in music (digital downloads)
• Business model changed; not
selling albums, but selling
songs a la carte
• Industry fighting illegal
download sites in court
(Napster)

14. Sound recording in the
digital age
• Transition: from vinyl disk >
magnetic tape > digital
encoding of music (multiple
storage options)
• The rise of the iPod: created
an entirely new industry
(iPod accessories), began a
new radio format based on
the idea of “shuffle” (Jack
FM)

15. The decline of the CD
• Sale of CD albums declined
steadily since 2000
• Typically consumers only like
one or two tracks from an album
• The digital revolution put the
power in the hands of the
consumer – buy just one track if
that’s all you want
• Music customization through
burned mix CDs, iPod playlists

16. Sound recording in
the digital age
• New products: Ringtones
• Mobile music: download to a
device, streaming, or “The
Cloud”
• User-generated content: artists
& labels that make and
distribute their own music,
allowing fans to remix songs
• Social Media: MySpace,
YouTube to discover performers

17. Defining features of
sound recording
• A cultural force, the products of the industry help
characterize social groups and define movements and
trends in American society
• The industry has been at the center of a great deal of social
and cultural controversy
• Elvis
• The Beatles
• 2 Live Crew, Ice T, Madonna

18. Organization of the
recording industry
• Talent: singers, musicians, songwriters, arrangers,
lyricists
• Production: Recording studio personnel, audio
engineers, promotion (public relations, advertising,
merchandising)
• Distribution: direct retail, rack jobbers, one-stops,
direct consumer sales, online sales, direct download
• Retail: importance has declined, but influence of big
marketers (Target, Walmart) increased

19. Ownership in the
recording industry
• Big companies account for more than 85% of the market (Universal,
Sony, EMI, Warner)
There are seven departments within a typical recording company:
1. Artists & Repertoire (A&R): talent scout, monitor influential music
websites, keeps an eye on local markets to see what’s hot
2. Sales & Distribution: sells the company’s products and then
distributes the product on CD and download sites
3. Advertising and Merchandising : plans media ad campaigns and
point-of-purchase displays in sales outlets. Works with promotion
department

20. 4. Promotion: helps promote the company’s artists;
getting songs on radio and film/TV, social media
5. Business: lawyers, accountants, market
researchers, financial analysts, secretarial and
clerical staffers
6. Publicity: attempts to get press coverage for new
artists and new releases, getting albums reviewed in
magazines and newspapers
7. Artist development: coordinates tour dates,
making sure the act has a well-produced concert
show, arranges TV appearances

21. Making a recording
• Demo: a sample of an artist’s sound
• Performers are signed to contracts to produce
music (a track or album)
• A master recording is made in the studio
• After the recording session, the recorded tracks
are mixed down into a master, which is given to
the promotions department, and advertising and
publicity begin shopping the disc

22. The Economics of
sound recording
Economic trends:
• Steady decline since 2000
• Digital downloading is a growth industry.
• Profit margin is less, since companies make
more on CD sales, and the sale of physical
media is dropping

23. New Business Model
360 deal:
• a company agrees to make a large cash
payment to a performer
• In return, the company gets a percentage
of all revenue generated by the performer
(including record sales, touring,
merchandise, endorsement deals, etc.)
Song licensing: video games, TV.
Example: Aerosmith made more money
from licensing to Guitar Hero than from
any of their albums

24. Feedback for sound
recording
Billboard charts
• Based on two components: exposure and sales.
• Relies on Neilsen SoundScan reports for sales figures.
• To measure exposure, data from Neilsen Broadcast Data Systems is
used – monitors airplay on more than 1,600 stations in the US, Canada
and Puerto Rico.
• Radio also uses Billboard to determine what songs they should play

25. Feedback for sound
recording
Sound recording audiences:
• Estimated more than 90% of all households have
the means to play a CD or digital download
• Older consumers account for more record
purchases (55%)
• Consumer spending for 19 and under declined
from 32% to 21%
• Even spending between males and females