History Of Physical Media

February 12, 2024

Here we will discuss a brief history of physical media, how its made its surging comeback in 2022, overtaking streaming revenues and why this is GREAT for the independent creatives in music. We will primarily focus on USA development of the physical media market, as they have been primarily owning the global Billboard Charts until recent years (more on why later)

Prior to the invention of physical media (1860s in France), music was only possible to be heard live and locally. This limitation made it almost impossible for distribution of sounds to be shared. At this time, the technology was print only from masters. It could not be used to record or create a master. This limited global impact of music to a very high degree. Uncoincidentally, this era was full of inequality. Slavery, etc. were very relevant in various parts of the world- a tough time to be a minority in many parts of the world.

In 1877, Thomas Edison created a substantial upgrade to the technology -- Edison’s phonograph could both record AND generate music!

By the early 1900s, the adoption began increasing, and the first US manufacturing plant was made in Camden, NJ. The music industry had troubles with stealing / copyright infringement from the beginning. In the early 1900s, IP law was especially hard to enforce and various manufacturers began iterating on Edison’s invention and building manufacturing plants in North America. RCA built a manufacturing plant in Canada in 1907.

Manufacturing was paused in 1939 during WWII in America, resuming in 1945 with an even more powerful punch after winning the war. By 1948 Columbia Records showcased the developments at the Waldorf Astoria in New York City, a highly prestigious hotel that is still here today! RCA and Columbia ended up in a technology race (similar to that of HD-DVD and Blu-Ray for movies in the early 2000s, or Sony’s Mini-Disc vs CDs for music). Technology upgrades included stacking records for continuous playback of multiple records, and different playing speeds. Frank Sinatra and The Beatles were introduced to the world and began distribution globally, as only a master and a distribution partner was needed to spread their sound. These artists, the very first to be globally spread / distributed still remain as the top players in the market of physical media. During this era, the music industry was primarily run by Caucasian people, and a majority of the marketing dollars / production allotments were given to Caucasian artists. Honorable mention to minority artists securing deals as early as 1890, and the first black owned record label in the 1920s. The first minority artist to go platinum (1 million record sales) did not happen until 1976 (Johnnie Taylor), timing closely with desegregation. In the 1970s, there were still high schools that followed segregation protocols (black / white people using different bathrooms, etc).

We were unable to find statistics on production numbers during this era, but are curious to find out - if you have first hand knowledge of this era or know of valuable sources of information please let us know.

In the 1970s, there was a cost-cutting manufacturing upgrade that allowed for exponential scale, creating thinner records than manufactured before

In the late 70s/80s, the first CDs were created, and the cassette market began growing with the introduction of the Sony Walkman in 1979. Music became mobile for the first time, revolutionizing the distribution of media. Humanity was no longer limited to listening to their favorite tunes in their home. The vinyl market naturally started to slow for the next 30 years or so. Production costs made it wise for distributors to limit vinyl production, and push users to cassettes and CDs, as they were more a more profitable item. The vinyl market took a sharp downturn during this time.

The CD market peaked in 2000, aligning with the dot com boom and rise in streaming revenues. Physical media lost its top spot in music revenues. For the next 20 years, the creation of independent music skyrocketed. Artists who grew fanbases during this era saw exponential fanbase growth faster than ever in history. Artists were able to grow in markets they were not even originally from. The platinum artist, Moby, who had his exponential rise around 2000 had been performing to an audience in Europe during the 90s before his sound was popular in the USA. His career was appearing to end when his album ‘Go’ was released. His fanbase had been consistent in Europe, but album after album (before GO) his sales had been falling. GO actually was not even an instant success! The launch party had less than 100 attendees in NYC at the Virgin Megastore. He also had a small tour for the album, at small / club like venues. Roughly 1-2 months after the release the album TOOK OFF, and he entered the top tier class of artists. He began modeling for Calvin Klein as well. This story is one of the first we could find that exemplifies the value of consistency / commitment to your art form. If Moby had not consistently worked hard on his craft in the 80s/90s, even without large success, he would not have had the lead in crowd to review / spread the word of how special the album GO was. Alternatively, Metallica had large troubles during this era with the streaming market and began lawsuits for copyright infringement with streaming companies allowing fans to get their music for free. Fighting for their ownership of their distribution rights, it set precedent for the industry - shutting down free streaming services.

In 2001 the iPod was introduced by Apple, and a roughly decade long era began of selling music on the internet! Songs began selling for 99 cents on iTunes and $9.99 albums. This allowed a new era of music to begin.

Streaming revenues peaked in 2012 at $3.9 billion! Around this time, Spotify and other subscription services began picking up users. This began the ultimate downfall of streaming revenues. Users were now paying $10 for all you can eat streaming packages, limiting potential music revenues greatly. There wasn’t much of a need to purchase an album with these subscriptions. This era also introduced social media / mobile applications / smartphones. Artists began finally collecting revenues on sales partnerships much better. The tracking of value of an artist was much easier, and contracts began increasing for exposure on artist. Justin Bieber arrived to the music scene in 2008, with exceptionally good timing to take advantage of this new ability to earn in the music industry.

In 2021, At just 28 years old, sources say his catalog was worth is $200+ million, it took just 13 years in his career. He is the only artist with this kind of public valuation in the top 10 in his 20s. Most other artists on this list have catalogs spanning back to the 60s, 70s, or 80s. The next youngest artist in the top 10 music catalog sales is almost 15 years older! Today there are many artists who have sold catalogs in the 8-9 figure range, with careers starting in the 2000s.

To Be Continued!!!

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