New York’s Magnamusic store (1939), with it’s sleek sleek interior styling, was certainly not typical, but it likely reflected the upscale tastes of one of the last remaining markets for records in the 30s – classical music. (Library of Congress)
Unfortunately, the boom in talking machines was drawing to a close. Even before the general downturn in consumer spending in the 1930s, the recording industry was in decline. At first, the culprit seemed like excessive competition. Over 150 companies were making records or record players by about 1920, and they were all trying to undercut each other’s prices. But the radio also acted as competition. Radio broadcasting began in some parts of the United States around 1922. During the 1920s, regular broadcasts began in many areas of the U.S. and Europe. Radio networks appeared, which linked together stations and promised to bring in massive advertising revenue. The companies running these networks spent lavish amounts of money to create special programming that was more spectacular than what was available on records. Despite the poor sound quality of the early radios, people were attracted to the programs and bought fewer records. The downturn was disastrous. The size of the industry in the U.S. alone declined by about one half in the early 1920s, then stabilized for the rest of the decade. Manufacturers introduced an improved form of record in the late 1920s called the “electrical recording,” hoping to lure customers back. This used microphones and electronic amplifiers in the studio to make the records, but could be played back on the old horn talking machines.
Some manufacturers also introduced combination radio-phonographs. While these new technologies helped a little, when the Great Depression came in the early 1930s, the record companies were too weak to survive on their own. The phonograph division of the Thomas A. Edison company had already terminated production in 1929. Victor was bought by the Radio Corporation of America to create RCA Victor, and Columbia was purchased, appropriately enough, by the Columbia Broadcasting System (CBS). Many of the other names in the industry simply disappeared.
1934 RCA Victor ad, emphasized its compatibility with “electrical” recordings, its built-in radio, and its automatic record-changer (an expensive option that began to appear about this time).
Through the 1930s, records continued to be sold in relatively smaller numbers. Classical music enthusiasts continued to buy records, but they did not constitute a huge market. The radio broadcasters bought also a fair number of records to play on-the-air, but again, sales of this sort were limited. There were new opportunities, however. When the talking motion pictures arrived, for a few years they actually used discs before switching to a system that put the “soundtrack” right on the edge of the film.
It was only in the late 1930s that the number of record discs sold began to climb. This was partly due to the gradually improving economy, particularly in the United States. It was also due to the growing number of jukeboxes in use. Jukeboxes consumed large numbers of records because they were usually changed every week or so. But the industry was still in trouble.