Cowboys and Indies: The Epic History of the Record Industry by Gareth Murphy Page B

around $15,000 per year. The age of percentage-based royalties had tentatively begun.
    Once all Victor’s artist contracts were renegotiated, in July 1919, Talking Machine World announced “the democratization of music.” The price of Victor’s classical and operatic records was being slashed to as low as $1. Even the cost of Victor’s most exclusive limited editions, which had retailed at $7, were being cut in half. In the accompanying visual campaign, operatic icons were photographed in boxing gloves, in kitchens, and on bicycles. Every effort was made to take the haughtiness out of classical music.
    What Victor hadn’t anticipated was the loss of its virtual monopoly on laterally cut discs. Perhaps the single biggest upheaval of the postwar years was a legal battle between Victor and Starr Piano Company, owners of a new record label called Gennett. In 1919, Gennett had dared to release a laterally cut disc and was, as expected, promptly sued by Victor. However, Starr’s lawyers were able to convince the court of a number of gray areas surrounding Victor’s patents. In January 1920, the U.S. Circuit Court of Appeals rejected Victor’s injunction and opened the floodgates to mass competition.
    Accelerating a process that had started during the First World War, the record business grew dense and vibrant. The industry’s monthly trade magazine, Talking Machine World, which contained about a hundred pages in 1916, doubled to over two hundred pages in 1920 with listings for about two hundred manufacturers. Many of these new talking machines were named after their founders: Cheney, Emerson, Heintzman, Wilson, Steger, Crafts, Onken, Weser. Other brands copied the sound of “Victrola” with names like Robinola, Harmonola, Tonkola, and Saxola. In record production, interesting new labels entered the market, including Brunswick, Aeolian-Vocalion, Gennett, Okeh, Paramount, and Black Swan.
    It was into this complex, rapidly evolving market that the period’s most progressive record man, Otto Heinemann, launched Okeh, arguably the first example of the alternative record label.
    Jehuda Otto Heinemann was born in the north German city of Lüneburg in 1877, the sixth son of sixteen children. At thirty-seven years of age, Heinemann was the managing director of one of Europe’s biggest record empires, Carl Lindström AG. Based in Berlin, it owned a vast record-pressing plant as well as three large labels: Odeon, Parlophon, and Beka. Its factory in Berlin employed thousands and pressed 100,000 records per day. With distribution operations in France, Britain, Austria, and Holland, the company was one of the first majors in continental Europe. It had just opened an office in Argentina, Disco Nacional, which produced the first recordings of tango legend Carlos Gardel.
    In the summer of 1914, Heinemann was sailing to New York to investigate industrial conditions in the American record market. War broke out when he was at sea, and as a result, he was briefly interned in the British port of Southampton before eventually arriving in America. As European countries began declaring war on each other through pact arrangements, borders closed, telegraph lines were severed, and shipping became hazardous. Watching events in Europe unravel from New York, Heinemann realized he was stuck in America and had to make money.
    Although starting from scratch, he was experienced and adaptable, and he had been studying the American record industry since his first trip in 1909. He registered an import-export business in New York, the Otto Heinemann Phonograph Supply Company, and set up a small factory in Ohio. His business plan was to supply motors to the blooming market of smaller independent phonograph manufacturers. As he hoped, Heinemann quickly found clients among the scores of newcomers sprouting up during the boom of the First World War.
    Heinemann wanted to move into record production but patiently observed the rapidly changing music market around