Cowboys and Indies: The Epic History of the Record Industry (3 page)

Like Berliner, Edison had no academic discipline. He had been home-schooled by his mother in a small town in Ohio, then started working at the age of twelve selling sweets and newspapers on the railway lines. His entry into the world of science happened by accident when one day he saved a stationmaster’s son from being killed by a runaway train. As a sign of gratitude, he was given a job as a telegraph operator for Western Union. Working the night shifts, Edison conducted his own experiments until he got fired for spilling acid that leaked through the floor onto his boss’s desk. Thanks to the sale of his
Quadruplex
system to Western Union in 1874, he made $10,000 before the age of thirty. With this windfall he set up a laboratory in Menlo Park, New Jersey, where he conducted experiments into sound, light, and wireless telegraphy simultaneously.

In the frantic months after Bell’s telephone went public, Edison stumbled on a novel idea for recording sound. Because he was partly deaf, he fixed a needle to the telephone diaphragm. As it vibrated, he could feel volume levels as pinpricks. As he tinkered with this method, he realized that if modulating sound could vibrate a needle, it could indent paper and perhaps record messages the way the telegraph punched holes in a tape. His design used a needle on a revolving cylinder to engrave the sound waves.

His stroke of genius was to realize that if you could write sound, by reversing the action, the sound would be reproduced. Nobody, including the brilliant Bell, had yet realized that the giant ear on a phonoautograph could be reversed into a sound horn.

In late 1877, Edison shouted a nursery rhyme into his phonograph prototype. To his utter amazement, it played back the first time. Coincidentally, on April 30 a French poet by the name of Charles Cros, deposited a design for a sound reproduction device with the Science Academy in Paris, six months before Edison applied for his patent in America. It’s reasonable to assume that the idea of sound reproduction was in the air. The two designs were, however, fundamentally different. The Frenchman’s idea was for a revolving disc containing a spiral of laterally cut sound engravings.

The Cros design, also called a
phonograph
, remained unopened in an archive in Paris while Edison was developing his own machine. In December, Cros demanded that his sealed letter be opened and publicly read, suggesting that news of Edison’s invention had reached Paris very quickly.

In that winter of 1877, American newspapers were reporting Edison’s discovery of a
talking machine
, the popular moniker for all future record players. When he was invited to the White House to show his invention to President Rutherford B. Hayes, speculation began that the gadget might be a hoax. One day Edison got a surprise visit from the influential Bishop John Heyl Vincent, who shouted a flood of obscure biblical references into the trumpet. When the phonograph played back the crazy recording, the bishop declared, “I am satisfied, now. There isn’t a man in the United States who could recite those names with the same rapidity.”

Despite the curiosity it aroused, Edison’s talking machine did not attract any investors. Fortunately for Edison, his electric lightbulb flicked on a few months later. Backed by J. P. Morgan and members of the Vanderbilt family, he formed the Edison Electric Light Company and predicted, “We will make electricity so cheap that only the rich will burn candles.”

Seeing that Edison had turned his attention to electric lighting, Alexander Graham Bell stepped back into the race, financing secret research to radically improve Edison’s promising invention. Bell’s life had changed profoundly since the telephone had become the great industrial success story of the day. In 1880, the French government awarded Bell the $10,000 Volta Prize. Not needing the money, Bell decided to set up the Volta Laboratory for his cousin Chichester Bell and another talented scientist, Charles Sumner Tainter, as his associates.

After four years of research, Bell’s team completed a vastly improved variation of Edison’s talking machine: the
Graphophone,
complete with waxy cylinders, a floating stylus, and stethoscope tubes for clearer listening. Shopping their patents around town, their first port of call was Thomas Edison, who, feeling distracted by problems in his flourishing lightbulb industry, declined. The young man who bought the Graphophone patents, Edward Easton, would prove to be the record industry’s first record producer. It was with the sale of the Graphophone patent that, symbolically at least, the record business was born.

Easton was the founding father of Columbia, the record company that would produce hits for over a hundred years. Sharp-eyed and ambitious, he was a former courtroom stenographer who sold his story of the trial of President James A. Garfield’s assassin for $25,000. Having gone back to college to study law, Easton, at the age of twenty-nine, was wealthy and seeking opportunity.

His short-lived partner in the venture was the older Colonel James Payne, a Civil War veteran. In 1887, the Volta Laboratory transferred its patents to Easton and Payne’s new company, the American Graphophone Company. Easton and Payne’s idea was to sell the Graphophone as a dictating machine to all the government offices in the Washington, D.C., area. To manufacture the machines, they rented a wing of a struggling sewing machine plant in Bridgeport, Connecticut.

It was at this crossroads that a tycoon finally stepped in—Jesse Lippincott, the record business’s first casualty. Lippincott, another Civil War veteran, had made his fortune in the glassware trade. Following his wife’s death in 1884, he moved into the Waldorf Astoria and became a familiar face in Manhattan high society. The New York press called him “
the Pittsburgh Millionaire
.” Inspired by Bell’s telephone, Lippincott was convinced the talking machine would be the next big thing.

He sold his glassware stock for a million dollars and convinced Edison to sell him both his phonograph patent and a majority of the stock in the Edison Phonograph Company for $500,000. Lippincott then turned his attention to Easton and Payne. With great prescience, Easton refused to sell his patent but instead suggested that Lippincott license the exclusive national sales rights for $200,000. In addition, Easton also negotiated an exemption for one sales territory: his home market of Washington, D.C., in which he set up Columbia Phonograph to sell talking machines directly to the federal administration.

Lippincott signed the various checks and created the first and only record industry monopoly. Copying Bell’s business model, he divided America into distribution zones, leasing the machines at $40 per year to licensed dealers, who in turn would lease the machines to users.

Despite a moderately promising start, Lippincott’s company and all of its affiliated distributors began hemorrhaging money. Wisely, Edward Easton went out to investigate what was happening on the ground. Throughout March 1890, in what would be the first nationwide study of the nascent record industry, Easton traveled coast to coast, visiting thirty-one of Lippincott’s regional branches.

To his amazement, Easton observed something nobody saw coming. A San Francisco distributor had transformed the phonograph into “pay to play” jukeboxes. Custom-built, in beautifully decorated wooden cases and fitted with coin slots, they were placed in arcades, saloons, drugstores, and various strategic places of passage. The fashion spread from California to other cities. Although the average take for most of these nickel phonographs was about $50 a week, the most popular jukebox was believed to be in a drugstore in New Orleans. It averaged $500 a month.

Within a year, Lippincott’s monopoly began to collapse. Cash-strapped local distributors began reneging on their rental bills; Edison and Easton were locked in disputes over their respective manufacturing quotas; a hundred creditors were knocking on Lippincott’s door. By autumn 1890, Lippincott was reported to have fallen into a state of “despondent paralysis.” Although he probably suffered a stroke, newspapers reported Edison’s claim that Lippincott had “become insane when he lost all his money.”

Edward Easton was the quickest to adapt. Jukebox operators found local entertainers to record two-minute routines, generally funny caricatures: yokel-alee, minstrelsy, operetta, fiddlers, unbelievable whistlers, exaggerated accents. Marching bands were popular in the Victorian age, and being very loud they were well suited to the limitations of phonographs. By hooking up ten machines to the same trumpet, a marching band could record ten cylinders simultaneously. Singers with powerful lungs could at best record three cylinders at a time.

Columbia signed an exclusive contract with the iconic U.S. Marine Band and began wholesaling their recordings to dealers. A taste of things to come, Columbia’s ten-page music catalog was divided into genre categories: Sentimental, Topical, Comic, Negro, Irish, Shakespearean recitals. Soon Columbia was producing 300 to 500 cylinders a day, sold mainly by mail order.

The first nationwide smash hit of the 1890s came from a black vaudeville performer by the name of George Johnson. Born a slave, Johnson made a living whistling and singing for coins in the ferry terminals on the Hudson, until in early 1890 he was spotted by local talking-machine dealers. Repeating the same routine over and over was a typical day’s work for the ferryboat singer, and between 1890 and 1895 he churned out 50,000 copies of his two hits, “The Whistling Coon” and “The Laughing Song.”

Another popular genre on jukeboxes was Irish satire, in particular a caricature called Casey played by a Bostonian actor, Russell Hunting. For example, “Casey as a Judge” consisted of rapid back-and-forth legal banter between a judge and an accused Irishman speaking in a thick Irish brogue. Another actor, Dan Kelly, invented Pat Brady, who also made hilarious pleas in courtrooms, canvassed for election, and described visiting the World’s Fair.

With Columbia racing ahead, Edison had to concede the talking machine’s future lay in entertainment, not utility. He forced the crippled remains of Lippincott’s company into receivership and initiated a legal battle to regain his patents. With Edison locked in a long dispute, Edward Easton reorganized and refinanced his group as its sole president, then overhauled the Graphophone with a steady-playing clockwork motor.

Intentionally making the better-known phonograph obsolete while Edison was stuck in two years of court procedures, Columbia released its new-generation Graphophone Type G Baby Grand in 1894 at a retail price of $75. Armed with his impressive catalog of music and comedy, the wily Edward Easton sensed the time had come to market talking machines to domestic audiences.

2. JUDGMENTS

In a Washington, D.C., museum one afternoon, Emile Berliner stood looking at a copy of Scott de Martinville’s phonautograph. He realized that its laterally cut grooves were fundamentally different from Edison’s vertically cut cylinders, and further research led him to the designs of Charles Cros. Sensing there was real potential for a patent, Berliner developed the Gramophone, which played a flat disc. Berliner still had many improvements to figure out, but he was a violinist, pianist, and composer who accurately foretold the destiny of this curious science even before the first jukeboxes appeared in San Francisco.

Presenting his prototype to the Franklin Institute on May 16, 1888, with a speech entitled “The Gramophone:
Etching the Human Voice
,” he predicted that in the coming musical explosion “future generations will be able to condense within the space of twenty minutes a tone picture of a single lifetime.” Dropping lofty names such as Italian soprano Adelina Patti, he asserted that “prominent singers, speakers, or performers may derive an income from royalties on the sale of their phonautograms, and valuable plates may be printed and registered to protect against unauthorized publication. Collections of phonautograms may become very valuable, and whole evenings will be spent going through a long list of interesting performances.”

As clairvoyant as he was, nobody was listening. By 1893, however, Berliner had better 7-inch prototypes and began publicizing the killer advantage of his invention over the phonograph: the possibility of mass duplication from a single master. His other smart move was to recruit a recording engineer with immense musical culture, Fred Gaisberg—arguably the first great A&R man in the record industry’s infant years. A&R stands for Artists and Repertoire, that part of a recording company that scouts talent and oversees its development.

Alas, Berliner’s efforts to attract capital investment were not helped by surrounding circumstances. The aftershocks of a huge economic crash, the Panic of 1893, were reverberating through the business world. An oversupply of silver had led to huge public demand to exchange silver money for gold. When America’s gold reserves reached their legal minimum and banks were forced to issue high-interest bonds, the markets eventually collapsed. In total over 15,000 companies and 500 banks went bust. The depression provoked a spate of anti-Semitism; in populist cartoons the Rothschilds were blamed for the crash.

Lacking the requisite skills of persuasion, Berliner employed a Methodist preacher to pitch his new invention to his former employers at the Bell Telephone Company. Listening incredulously to a woozy hand-driven recording of Berliner singing “Twinkle Twinkle Little Star” in a thick German accent, his former colleagues winced. “Has poor Berliner come down to this? How sad! Now if he would only give us a talking doll, perhaps we could raise some money for him.”

In stark contrast, Edward Easton was aggressively advertising Columbia’s arsenal of products in all of America’s household magazines:
McClure’s, Cosmopolitan, Munsey’s, Harper’s,
etcetera. Despite the recession crippling the entire consumer economy, Columbia enjoyed such a spurt of growth that Easton moved his head office from Washington to Manhattan and opened regional offices in Chicago, Philadelphia, St. Louis, Baltimore, and Buffalo.

Then Edison, having succeeded in clawing back his patents, reentered the market in 1896. Competing with Columbia on every front, Edison began his own music catalog, slashing prices further with his own clockwork phonograph, retailing at just $40; within a year, he was offering a $20 instrument. By Christmas 1897, Columbia hit back with a $10 clockwork Graphophone. Prices hit rock bottom with an Edison model called the Gem at just $7.50. In the space of five years, the talking-machine market had undergone a revolution in accessibility.