The Great Depression (1929-1941) did not spare the American record industry, as record sales decreased from 104 million units in 1927 to 10 million in 1930, a decline of over 90%! The sale of record players saw a similar decrease. Some companies, such as Edison, could not survive and simply closed. Other record companies sold themselves to bargain-hunting investors. Columbia, for example, was purchased by a refrigerator and radio manufacturer in 1931. Others combined forces to weather the storm, such as English Columbia and English Victor joining to become EMI in 1931 (the company that would eventually sign The Beatles). (The British subsidiaries of Columbia and Victor had been earlier spun off of their American parent companies to be run independently.) The result of all the reshuffling of record company ownership as a result of the depression was a significant consolidation in the industry. By 1934, only four severely-diminished major record companies controlled most of the market: RCA, ARC (which owned the Columbia and Brunswick labels), EMI, and Decca.
The one bright spot in the industry was the rise of big-band jazz, featuring up-tempo dance tunes that kept America entertained through the period. Big-band jazz in the 1930s developed with the significant help of one producer immune to the ravages of the great depression, John Hammond (1910-1987). Hammond’s mother was the great-granddaughter of Cornelius Vanderbilt, one of the wealthiest American industrialists of the 19th century. Hammond’s elite education and appreciation for musical culture, together with his vast inherited wealth, gave him the ability to become one of America’s most important producers of the 20th century. He had an uncanny ability (bolstered by economic security) to get behind extraordinary musical talents whose iconoclastic styles made them risky for those who needed quick and certain mainstream success. The list of talents recognized and promoted by Hammond over several decades despite (or because of?) their off-beat styles is remarkable for its breadth and quality: Billie Holiday, Benny Goodman, Count Basie, Robert Johnson, Pete Seeger, Bob Dylan, Aretha Franklin, and Bruce Springsteen. Each of the these had musical styles that did not fit squarely into mainstream tastes, but Hammond’s belief in them and ability to advocate for them inside record companies resulted in careers that became among the most significant in popular music history. In the case of Mississippi bluesman Robert Johnson, Hammond’s interest was piqued shortly before Johnson died in 1937. However, Hammond later pushed for the release of all of Johnson’s relatively unsuccessful (and in many cases, previously unreleased) recordings in 1961 by Columbia, a project that propelled Robert Johnson to the status of a blues icon over 20 years after his death.
John Hammond also had a passion for trying to eliminate the segregated racial marketing bias that still gripped the recording industry in the 1930s. Hammond’s support and encouragement of racial integration in the music industry led to many integrated performances and recordings in the 1930s that were the first to break those barriers. Hammond also personally produced a pair of monumental concerts known as “From Spirituals to Swing” in 1938 and 1939 in Carnegie Hall in New York City, featuring many of the iconic black performers of those years in jazz, blues, and gospel. Hosting such a concert at that time in America’s premier classical music concert hall was a provocative and courageous challenge to those who still believed in the racial segregation of music.
Another positive industry development in the 1930s was inspired by the end of liquor prohibition in America in 1933. American’s had not stopped drinking liquor during Prohibition (which began in 1919 with the ratification of the 19th Amendment, repealed by the 21st Amendment in 1933). Rather, the consumption of alcohol had merely moved underground to so-called “speakeasies” — bars and clubs that sold liquor illegally (and were thus more exciting and popular than legal bars had ever been). With the repeal of Prohibition, the speakeasies became legitimate establishments again, creating a newly-legal market for musical entertainment. The automatic, coin-operated, record playing machine, which would later be called a “jukebox,” rushed in to fill this void. From 1934 to 1937, production of jukeboxes in America rose by over 1,000% (from 18,000 to 210,000), and by 1939, stocking of records to jukeboxes made up a significant percentage of record sales. The jukebox not only provided a new market for record sales and promotions, it provided instant feedback to marketers as to which record titles were most popular with certain demographics or geographic areas. When a customer put a coin in a jukebox and chose a particular song, that selection was recorded by the jukebox and collected by the record companies and media as a form of early opinion polling on popular music taste.
The record industry saw a significant recovery in 1938, as Decca and Victor dominated sales, combining to sell 33 million records in that year, and 225,000 jukeboxes were in operation, the stocking of which required 13 million records per year. Columbia Broadcasting Service, which by 1938 had become the third-largest radio broadcaster at the time, re-acquired its namesake Columbia Records in another sign of renewed optimism for the record industry.