Business History, 2013

Vol. 55, No. 3, 327–347, http://dx.doi.org/10.1080/00076791.2012.712963

A distribution revolution: Changes in music distribution in the UK

1950–76
Kevin D. Tennent*

Open University Business School, Milton Keynes, UK

Little business history has been written on the popular music industry while
sociological study has tended to focus on the effect of the industry on society. This
paper concentrates on how recorded popular music reached the customer, charting
the evolution of the industry in the UK from a cartel structure distributing only to
specialists, into an industry which allowed upstream entry freely but increasingly
emphasised large-scale distribution through mass retailers by the mid-1970s. The
paper examines the structure of music distribution in the UK prior to 1965 and how
the industry adapted its distribution strategy to the changing environment after 1965.
Keywords: popular music; creative industries; distribution; retail; resale price
maintenance; record shops; music majors; independent record labels;
competition; post-war Britain

1. Introduction
Academic study of the popular music industry in Britain has largely been confined to
the sociological discipline, often being more concerned with how music affects the
listener rather than how it reaches them.1 Recent notable exceptions in the business
history field have included papers by Bakker and by Gourvish and Tennent,2
although both of these leave much scope for expansion. More generally, scholars
concerned with economic and business history have largely skirted round the topic,
despite the increasing interest in the study of contemporary business history in the
post-war period. Scholars such as Dintenfass, Broadberry, and Owen have taken
interest in the fortunes of British business since 1945, evaluating the thesis that the
country experienced relative economic decline in this period.3 Owen pays particular
attention to the decline of British and European firms in the related fields of
engineering and electronics, but does not note the role of British and European firms
in the rapidly industrialising music industry.4 The popular music industry’s fortunes
in the period contrast to some extent with those of British firms in more mature
industries – firstly, the UK market share of music attributable to UK performers
increased dramatically in the early 1960s and, despite a brief window of returned US
dominance in the late 1960s, the UK’s share of the market remained resilient into the

*Email: k.d.tennent@gmail.com; kevin.tennent@york.ac.uk

Kevin D. Tennent is now affiliated with The York Management School, The University of
York, UK.

© 2013 Taylor & Francis

328 K.D. Tennent

1970s.5 Gourvish and Tennent have also found that the UK sales of the industry
grew in absolute terms from 1950 right up until the late 1970s, although some of
these sales were generated by the subsidiaries of Dutch, German, and US
multinationals.6
There has also been some interest in the degree to which British business fitted the
Chandlerian paradigm during this period; although writers such as Lamoreaux, Raff
and Temin, and Langlois have argued that the Chandlerian model became less
relevant even in the USA in the later twentieth century, there remains interest in how
far Britain fitted the paradigm and whether this was important for British decline.7
Most notably, in Scale and Scope Chandler points towards British firms suffering a
disadvantage compared to their American and German counterparts because they
did not adequately invest in the ‘three prongs’ of management, production, and
distribution. This is particularly held to have come about in ‘second industrial
revolution’ industries such as motor vehicles, chemicals, and electrical engineering. In
particular, as the product line became more sophisticated, Chandler points to the need
for wholesalers, and perhaps retailers, to become more specialised, hiring specialised
staff and investing in specialised facilities. The need to invest in these facilities would
make it more difficult for a general wholesaler, attempting to deal in a wide range of
commodities, to achieve economies of scale and scope, and give a manufacturer
integrating downstream a cost advantage. This was also to be supported by a sales
force, directly owned by the manufacturer and able to channel information back and
forwards from the marketplace.8 On the empirical side, Chandler claimed that the
preference of British firms for what he called ‘personal management’ (i.e. by family
members or other non-professional managers) slowed their investment into distribu-
tion, making them less able to achieve the magical economies of scale and scope.9 While
Hannah has recently found that Chandler’s underlying Whiggish ideology impaired the
quality of his judgement, the theoretical position that the three prongs were crucial for
corporate success continues to have implications for music.10 Recorded music was
arguably a second industrial revolution industry; the gramophone was invented in a
similar era to the internal combustion engine and relied upon electrical technology.
Music required economies of scale and scope in distribution – the ability to handle a
large and diverse catalogue, while also responding to the fast turnover requirements of
the popular part of the industry. Arguably some specialist knowledge of music and
current tastes was required. As record companies broadened their catalogue the
diversity of specialist knowledge required thus increased – and the challenge of fulfilling
retail demand potentially became more complex, as wholesalers would be expected to
deal with a diverse catalogue perhaps composed of several genre types, all of which
would gradually develop their own ‘hit parade’. If Chandler’s logic were applied, we
might expect to see record companies taking control of the wholesale process to ensure
that the economies of scale and, especially, scope present in producing a wide variety of
catalogue were fully exploited.
As well as contributing to the wider historiography of British business history,
this paper also adds a new dimension to the retailing and distribution literature in
two ways; it highlights music, of which little has been written, as well as the role of
the wholesaler and manufacturer in distribution. Work on retailing by contemporary
authors such as Godley, Morelli, and Shaw, Curth, and Alexander has tended to
focus on the downstream aspects of retailing; all three studies covered the
introduction of self-service and other innovations but tended to focus on food or
variety retailing.11 Distribution was an important weapon for large-scale
 Business History 329

manufacturers to retain their influence over marketplaces and fight back against the
market entry encouraged by the growth of the consumer market in post-war Britain.
The abolition of the traditional system of Resale Price Maintenance (RPM) phased
in on an industry by industry basis from 1965 onwards, which had allowed
manufacturers to set legally binding minimum retail prices for their products, was a
further threat to the oligopoly position that manufacturers had previously been able
to cultivate for themselves. This paper studies the response of the music industry
from 1965 onwards – although RPM on gramophone records was only finally
abolished in 1969,12 its rigid enforcement by the industry died away, and the biggest
firms shifted their emphasis from recording to distribution. Surprisingly little
attention has been paid to the abolition of RPM by business historians, despite its
implications for the structure of the wholesaling and retail trades after 1965,
particularly in increasing their control over margins, thus making greater scale
economies feasible. Godley has referred to the adoption of RPM in the inter-war
era,13 while Shaw, Curth, and Alexander noted that it slowed the adoption of self-
service in supermarkets,14 and da Silva Lopes saw that it increased competition in
the British wine market.15 In regard to RPM, this paper intends to reawaken this
debate with an eye to the medium term consequences for the strategy of British post-
war business, as well as for the longer term consequences for retailing and
distribution more generally.
The three main UK-based companies in this period were EMI, Decca, and Pye,
all of which had interests in gramophone hardware as well as software. Chandler did
not say much about the music industry, but he does praise EMI’s pre-war
management team of chairman Arthur Clark and managing director Louis
Sterling.16 EMI was the product of a merger between the Gramophone Company
(the British affiliate of the US’s Victor Talking Machine), and Columbia
Graphophone, which Sterling had bought from its US parent in 1925. As Clark
and Sterling were both Americans, it may have suited Chandler’s Whiggish narrative
to draw attention to their achievements, particularly as they ‘consummated the
merger in the American manner’, by eliminating duplication and consolidating their
sales forces.17 Here, however, Chandler confuses matters a little by focusing
attention on EMI’s rapid expansion into other areas of the electrical industry,
particularly radio manufacture, electrical appliances, and the manufacture of
broadcasting equipment. Chandler does point towards the separation of ownership
and control at EMI and the professionalisation of management within, thus we
might expect it to be capable of extending this professionalisation into distribution.
EMI’s structure contrasted with Decca, which originated as a branch of a musical
instrument firm before its purchase by a young stockbroker, Edward Lewis, in
1929.18 Although Decca was also stock market listed, it tended more towards the
personal capitalism model derided by Chandler; the ordinary stock was not given
voting rights and the company was dominated by Lewis and his appointees on the
board until his death in January 1980. Although Decca expanded away from music
into radar and marine navigation during and after the Second World War, following
Chandler’s logic we might not expect Decca to integrate as far downstream as EMI.
Pye was initially similar to Decca in that it was dominated by its main shareholder
C.O. Stanley, who co-operated with the theatrical agent Lew Grade to found the
Independent Television contractor Associated TeleVision (ATV) in the early 1950s.19
Pye’s record division was then sold to ATV in stages between 1958 and 1964, with
management rights ceded to ATV in 1958.20 While Grade himself dominated ATV,
330 K.D. Tennent

Pye Records was given a high degree of independence, particularly under its
Managing Director Louis Benjamin from 1963 to 1973, who was trusted to expand
the business.21 Pye might then be considered a case of limited managerial capitalism,
particularly after its purchase by ATV.
These three companies were followed into the UK market by Philips Records, an
arm of NV Philips Phonographische Industrie of the Netherlands, forming the UK’s
‘big four’ record companies. Another notable continental entry was Siemens’ record
division Deutsche Grammophon, which used the brand name Polydor for its
popular releases. Philips and Polydor operated a Europe-wide alliance from 1962
until 1972,22 when they were merged by their parent companies to form PolyGram,
which continued as an important player in the UK market until the end of our
period.23 PolyGram also purchased Decca’s music interests on Lewis’ death in
1980.24 The larger US record companies then entered the market in the mid-1960s,
having traditionally licensed their material to the European companies rather than
recording in the UK themselves. The most important US companies to become
established in the UK were CBS, RCA and the Warner Group; RCA and Warner
integrated forwards into manufacture and distribution, while CBS initially
distributed via EMI’s network.25 Although EMI was ultimately forced to merge
with the British electrical company Thorn to stay afloat in 1979, it remained the most
powerful player in the market throughout the 1950–80 period – a position defended
through forward investments in distribution and retailing. Therefore the record
industry could be considered one in which British firms remained competitive
throughout the post-war period, and one which weathered the various storms in the
economy – such as the devaluation crisis of 1966–67 and the resultant credit squeeze,
and the oil crisis of the early 1970s which caused materials shortages and inflationary
pressure – relatively well.
One of the main challenges faced by historians working on popular music has
been the difficulty in finding relevant data, as archives related to the subject are often
themselves considered important assets by the record companies.26 Ideally, it would
be possible to find the market share of each distributor in the industry – this is not
known to be published. To work around this, this paper uses qualitative evidence
from trade papers to illustrate the important changes in record distribution in the
1950–80 period. It also draws on the database compiled by Gourvish and Tennent,
who followed in the tradition of Peterson and Berger, assembling market share data
for the industry based on the music charts, working on the assumption that the
records featured in them had a significant enough share of the overall market to
show which companies were enjoying greater market share at which time.27
Gourvish and Tennent concluded that creative competition increased rapidly during
the 1950–75 period;28 this paper will build on that by showing that this increase was
achieved through effective consolidation downstream of the creative process.
Secondly, some of the qualitative information referred to here was sourced from
the annual reports of the companies concerned, although by far the most important
sources have been the trade journals, most notably the Record Retailer and Music
Industry News and its successor publication after 1972, Music Week. These
publications were aimed directly at music retailers, and were used by record
companies to advertise to the trade. Editorially they kept record shop owners aware
of who was responsible for distributing what, as well as covering business news in the
industry generally. This has made it possible to compile, as far as possible, an
account of who was distributing what and at what time. It has also been possible to
 Business History 331

learn from them the practical arrangements that were made for the wholesaling of
records, and to show how the records actually reached the shops, as well as which
types of shops they were reaching. This paper will now move on to set out the
structure of music distribution in the earlier part of our period, roughly before the
abolition of RPM became law in 1965, before moving onto examine the changes
made in and after 1965, and show how they helped the main players in the industry
to defend their position against new entrants.

2. A cosy cartel: distribution under resale price maintenance, 1950–65

At the start of the 1960s the system of record distribution in operation very much
reflected the industry’s history as a branch of the electrical industry, representing
product development rather than market development in the Ansoff sense.29 EMI
and Decca in particular had originally entered the industry as manufacturers of
gramophone hardware; software logically followed as a product appealing to the
same market. Philips followed from the start of 1953 when it acquired the rights to
the US Columbia label outside of the Americas, which also allowed for the exchange
of repertoire, from EMI.30 This benefited Philips in breaking into English-language
markets as its Netherlands-based operation had previously been focused around
classical and folk; classical recordings could be exported to the US for release by
Columbia, while English-language popular songs could be exported from the US to
the UK.31 Pye Records’ original parent company, Pye of Cambridge, was also a
hardware manufacturer. Pye entered the industry in around 1954 when it purchased
two small UK independents, Polygon and Nixa. Polygon was founded by the A&R
man Alan Freeman and Lionel Clark, the father of singer Petula Clark, who later
became mainstay of Pye’s pop offerings, but met with limited commercial success as
it had no manufacturing capacity of its own. Nixa had specialised in classical releases
and this gave Pye a catalogue base to start from.32 Certainly EMI, Decca, and
Philips laid great emphasis on creating high quality classical recordings as evidence
of the technical quality both of their recording studios and of their players,33 even
though since the adoption of the 78rpm, and then 33 and 45rpm standards at the
start of the 1950s it was possible to play a record made by any company on any
player. In the material circulated to the shareholders the popular market was rarely
mentioned.34 This emphasis on technical quality followed through to the distribution
level; wholesaling in many areas was done by specialist wholesalers known as
electrical factors, who otherwise supplied electricians and electrical dealers with
components and appliances.35 In retailing, too, gramophone records were often
carried by electrical shops, rather than specialists with the emphasis on music,
although such specialists became increasingly important as the market grew
throughout the 1950s and 1960s.36
Throughout the early period Philips and Pye found it difficult to challenge the
extreme market dominance of EMI and Decca. As illustrated in Figure 1, in 1960
EMI and Decca both held market shares of approximately 40%, leaving Philips and
Pye with 7.9% and 7.4% respectively. At this point both EMI and Decca controlled
most, if not all, of their own creative output, as well as continuing to have access to a
larger share of US-originated material, EMI having purchased Capitol Records in
1954 and Decca having the UK licence for RCA products. From a position of
controlling Chandler’s prong of production, they were also more vertically
integrated into distribution at this point than the newcomers were. EMI had long
332 K.D. Tennent

Figure 1. Creative market shares, 1952–75.

Source and notes: Gourvish and Tennent database. Creative market shares are derived from
the percentage of records appearing in the top 50 single, album or EP charts in a calendar year
as far as they were available, assigned to each independently owned label. For full details of
data used see. Gourvish and Tennent, ‘Peterson and Berger Revisited’, 202–3.

operated a form of franchising system for retailers based around the His Master’s
Voice (HMV) label, which carried all of EMI’s classical and folk recordings but also
some pop.37 Retailers could only purchase HMV records from EMI’s own depots,
and in order to do this they had to become ‘HMV dealerships’.38 This essentially
encouraged dealers that opted into the scheme to source their supplies of other
manufacturer’s records from EMI’s depot networks as well, as EMI also supplied
Decca, Phillips, and Pye records, as well as the small number of releases produced by
the long-standing minor company Oriole, and Deutsche Grammophon’s classical
releases. By 1961 EMI had depots in London, Birmingham, Manchester, and
Glasgow, all of which supplied a considerable hinterland by road.39 Decca’s
distribution subsidiary Selecta had branches in London, Manchester, Leicester, and
Newcastle by 1957, mostly established by purchasing existing factors, which also
supplied EMI (except HMV), Philips, Pye, Deutsche Grammophon, and possibly
Oriole records to dealers, also by road.40 These networks were also supplemented by
independent factors around the UK, such as Keith Prowse in London, Martins in
Birmingham, Clyde Factors in Glasgow, and Symphola of Belfast.
Philips and Pye followed EMI and Decca by making significant investments in
distribution in their own right. Philips opened a London depot around 1959 and
followed this with branches in Birmingham and Manchester by 1963.41 A Leeds-
based factor, Appletons Ltd., was purchased in early 1963 and its goodwill moved to
the Manchester depot; in the same year a depot was also opened in Glasgow.42 Pye
also followed, opening a London depot at its Mitcham factory, as well as opening
 Business History 333

depots in Leeds and Newcastle, which was later moved to Glasgow.43 Philips and
Pye followed a different approach to EMI and Decca as they offered only their own
labels to the trade via their depots, supported by van delivery services, with the
promise of faster delivery. This forward integration appears to have had relatively
little effect on market penetration by both companies; as illustrated in Figure 1, by
1964 EMI and Decca’s share of the charts remained at 38.5% and 34.4%
respectively; while Philips and Pye had increased their shares to 12.4% and 13.8%
respectively. While EMI and Selecta continued to carry Philips and Pye records, a
retailer would logically have a strong incentive to keep transaction costs down by
dealing with only one wholesaler, rather than opening extra accounts with Philips
and Pye. Opening an account with, say, Pye would also mean more pressure to stock
Pye discs, not necessarily attractive from the retailer’s point of view as Pye products
carried less promotion than EMI or Decca discs. Nonetheless, by exclusively
supplying discs licensed from CBS via its depots Philips successfully tempted a
significant number of dealers to open accounts with it, claiming to supply 70–75% of
its UK records through its own depots by February 1965.44 As early as 1960 the
Financial Times claimed that ‘Pye operates its own sales force to supply direct to
some 8,000 dealers all over the country’, although actual delivery for dealers outside
the South East may have been via the EMI, Selecta, or an independent factor’s
network.45 The same article noted that Pye had also made point-of-sale publicity
available everywhere and had, for instance, been able to distribute 250,000 copies of
a Lonnie Donegan record nationally within five days, scoring a top five hit within a
week. It is worth noting that, as Figure 2 shows, real record prices had started to
move downwards from 1962 onwards, perhaps driven by the moderate increase in
competition between manufacturers encouraged by Philips and Pye’s entry as well as
the increasing volumes sold as demand spiked due to the ‘beat boom’ of 1962–65 (see
Figures 1 and 3).

Figure 2. Real record prices, 1960–76.

Source: British Phonographic Industry data, BPI Yearbook 1976.
334 K.D. Tennent

The existence of a cartel in distribution, whether formal or informal, is evidenced

most visibly by the difficulties encountered by minor or new entrants, who lacked the
resources to invest in distribution. Of attempted challenges in the 1950s, the
appearance of Gala records in 1958 was perhaps the most interesting, because it
represented a direct attempt to compete with the established companies’ popular
repertoire on price, and even gained the attention of The Economist.46 Gala was
owned by Musical and Plastics Industries Ltd. (MPI), which made both moulded
plastics and musical instruments; it had purchased the rights to a new pressing
system from the US which allowed for the pressing of multiple copies of a record at
once, while the established companies were able to press only one copy at a time.
This allowed Gala to market its 45rpm single records at just 6s 6d, compared to 11s
for the majors, and by the end of 1959 Gala had reduced this price further, to just 4s,
and was even marketing 78rpm singles aimed at children at just 2s 6d. The new
entrant was also said to be investing in TV advertising to back these releases, which
were mostly sourced from smaller US independent record companies whose output
was yet to be licensed to the UK big four, it being noted that stars like Bing Crosby,
Roy Rogers, and Dale Evans were appearing on the children’s discs.47 On the other
hand, Gala could not gain access to the distribution networks of the established
companies, although it was said to have secured a distribution deal with a ‘provincial
record wholesaler’, probably H.R. Taylor of Birmingham, which distributed a
number of minor labels.48 In the main Gala was still restricted to marketing its
records via non-specialist outlets such as chain stores, newsagents, and tobacconists,
which the majors generally refused to supply.49 This meant that Gala’s records were
not sold in any of the shops used to gain chart returns by the music press and missed
out on any extra publicity that might be gained from TV or radio appearances. Gala
does seem to have enjoyed some limited success, pioneering rack retailing via non-
specialist stores, but MPI demerged it in early 1961, suggesting that it was unwilling
to continue to subsidise the company.50 MPI was to continue to press the records for
Gala, but the company seems to have withered away after demerger from MPI.

Figure 3. UK recorded music production, 1955–80.

Source: British Phonographic Industry data, BPI Yearbooks 1976 and 1982.
 Business History 335

The other major attempt at entry in the late 1950s was by the Rank Organisation,
whose music label Top Rank attempted briefly to establish itself as a fifth major,
mostly based upon repertoire already owned by the company in the US. Although
Rank had originally proposed entry via a record club promoted in its cinemas, the
company abandoned this proposal to enter via the conventional channels instead,
gaining the co-operation of the big four’s distribution networks. This occurred partly
because Rank possessed no pressing facilities of its own, relying on hiring the surplus
capacity of Philips and later EMI, giving both companies an incentive to distribute
Rank’s products, but also because Rank did not pose a cut-price threat, abiding by
the existing RPM framework. Rank also invested in distribution by purchasing the
wholesalers Thompson, Diamond and Butcher in August 1959. Rank was therefore
able to break into the charts, capturing a 2.8% share in 1960, though returns were not
substantial enough for Rank to remain interested in the long term. In August 1960
Rank handed the UK label and goodwill over to EMI for free, along with the licence
for Rank’s US releases, although it retained Thompson, Diamond and Butcher.51
February 1960 saw the entry of Triumph, a label run by the pioneering
independent record producer Joe Meek. Meek took an entrepreneurial approach to
music production, preferring to work at home rather than in the studio, and
extended this to attempting to set up his own label, backed by the small specialist
classical music company Saga. Triumph placed itself in the market as a label aimed
at the emerging teenage market, so ought to have been in a good position to profit
from the growth in this segment, at this point, between the emergence of rock and
roll in the 1950s and the beat boom of 1963–65, arguably poorly served by the big
four. Despite not, at least openly, challenging the established companies on pricing
grounds, and like the majors, insisting that its records could only be sold through
‘recognised record retailers’, the major’s distribution networks did not carry
Triumph’s records.52 The company was instead forced to rely on the smaller
factors, including Keith Prowse Ltd. in London and H.R. Taylor in Birmingham, for
distribution, as they had already carried Saga’s classical material.53 This was not
enough to guarantee commercial success; despite sponsoring its own programme on
Radio Luxembourg and organising a tour of seaside resorts for its artistes, Triumph
managed just 12 appearances in the singles chart before a winding up order for the
company was issued in November 1960.54 The company’s partnership with Saga was
terminated in summer 1960, with Triumph attempting to distribute on its own, while
Joe Meek left to become an independent producer.55 Meek went on to release via
Decca while working for a small producing firm called RGM Sound, possibly the
first instance of such an arrangement, enjoying great commercial success with Telstar
by the Tornadoes, which was released on Decca’s own label and enjoyed a run in the
UK singles chart for 25 weeks in late 1962 and early 1963.56 This was a move that
would have important historical consequences for the upstream organisation of the
industry, more of which below.
Two entrants to the popular music market of the earlier 1960s did last. The first
was Ember Records, which was launched in June 1960, promising dealers a 40%
discount and a profit margin of 71%, comparing favourably with the 25% margin on
other records.57 This margin would later increase to 33% (see Appendix Table A1).
Ember backed its small popular catalogue with a classical catalogue, and this seems
to have helped persuade larger factors to carry the label. By February 1961 Selecta
was supplying Ember records to dealers on special order, though it was not holding
stocks of Ember records as yet.58 Selecta did begin a full distribution service for
336 K.D. Tennent

Ember in 1963, and by 1965 EMI was also distributing Ember records.59 The other
main lasting entrant of note was the R&B specialist Island Records, originally
Jamaica-based, established in London in 1962.60 Island also had initial difficulty in
having its records distributed, particularly as the music did not initially have wide
appeal, and even established its own van service to deliver direct to retailers in
London by 1964, as well as being carried by some independent factors, although it
was not able to gain national distribution until EMI started carrying the label in
March 1964.61 Ember and Island both entered the market in a period when access to
distribution channels was beginning to open up, although neither managed to attain
distribution through all channels, and their chart shares remained low, Ember
managing a 0.27% share by 1963 and Island not appearing in the charts at all until
1966. Island arguably did not present a direct competitive threat, as Triumph had, to
the established majors, specialising in a type of music neglected by them.
Ember and Island were also different in that they both purchased time on Radio
Luxembourg, which was key to record promotion in the UK until the establishment
of BBC Radios 1 and 2 in 1967 created an onshore vehicle for record promotion.
Radio was important because it allowed consumers to hear music that they might
want to purchase, and in itself represented an electronic music distribution medium.
Though radio was subject to the free rider problem that listeners could simply record
the music broadcast on tape themselves,62 the big four record companies
enthusiastically invested in the medium. Throughout the 1950s and into the 1960s
Radio Luxembourg had an effective monopoly of UK popular music broadcasting,
and was also outside of the regulation of the UK’s General Post Office ministry,
which strictly regulated UK commercial television, restricting advertising time.63 This
meant record companies were able to buy up whole programme spaces on Radio
Luxembourg and produce their own programmes to promote releases on their labels.
The big four firms invested heavily, with EMI purchasing 11 hours of broadcasting a
week in 1962 compared to 12.5 hours shared by all other record companies.64 EMI
produced programmes in-house before sending them to Luxembourg for transmis-
sion, showcasing releases on the company’s three core labels, HMV, Columbia, and
Parlophone, in separate programmes.65 Decca, Philips, and Pye programmes filled up
the vast majority of remaining airtime, although smaller companies such as Ember
and Island were able to buy cheaper slots late at night.66 Radio promotion was also an
important signalling mechanism for factors and retailers to predict potential demand,
being able to decide which new releases to order in quantity on the assumption that a
broadcast would stimulate demand for certain records. As retailers could not always
be expected to listen to these broadcasts, lists of new records being promoted on
Luxembourg were regularly printed in Record Retailer, along with news of any
changes in schedule.67 Direct investment in radio promotion was therefore a key
element in supporting Chandler’s third prong of distribution, for the record
companies, retailers, and the end customer alike.

3. 1965–80: creative expansion and downstream pressure to end the cartel

The long-running system of Resale Price Maintenance was coming under increasing
pressure in the early 1960s in a variety of consumer goods markets. Mail order
discounting clubs offered another alternative retailing channel, which often undercut
RPM on branded goods, although EMI’s consumer electronics division Morphy
Richards was noted for its strong line against such retailers.68 The Conservative
 Business History 337

government of the period, which had already introduced the Restrictive Trade
Practices Act of 1956 in an attempt to outlaw cartels,69 moved to abolish RPM in the
Resale Prices Bill of 1964. EMI, fearing the loss of market power to large retailers
which would now be free to cut prices, moved first to apply through the Restrictive
Practices Court for an exemption to the Resale Prices Act when the act received
Royal Assent in July 1964, a manoeuvre supported by Decca and Philips.70
The Restrictive Practices Court established to oversee the 1956 act struggled to
cope with the new caseload that the 1964 act placed upon it. The majors effectively
stopped pursuing their case after the Restrictive Practices Committee announced in
May 1965 that the industry’s case was unlikely to be heard in 1965 as 700 different
industries had applied for exemption; indeed this hearing was postponed until 1969,
and then not held at all.71 From 1965 the majors began to assert control of the
distribution process more aggressively than they had before, while resisting the direct
supply of discount stores. The big four’s wholesale networks, led by Philips and then
EMI, stopped carrying each other’s products and instead carried only their own core
labels plus a selection of licensed American and UK independent labels. Strict
minimum order levels were now introduced and sale or return percentages tightened.
Philips was first to announce that it would no longer supply other wholesalers, from
March 1965. Until this point 25–30% of its labels had been sold through non-Philips
wholesalers, and this represented a considerable downstream integration on the part
of Philips, as it would mean that all retailers wishing to stock Philips Records would
have to open a direct account with the company. Leslie Gould, the UK General
Manager of Philips, told Record Retailer that the move would allow Philips to
control its own distribution better.72
In July 1965 EMI followed Philips by announcing its move to exclusive
distribution, although this was not to be effective until 1 July 1966 to allow for stock
clearance and for retailers to adjust.73 As EMI’s chart market share was still
somewhat higher than that of Philips (35% compared to 9% – see Figure 1), this
move proved to be much more controversial among the independent factors and
retailers affected. The Belfast factor, Symphola, protested particularly loudly as
without EMI records to distribute it would be left without a raison d’eˆtre –
unsurprisingly, EMI was quick to conclude a deal to give Symphola exclusive
distribution rights in Northern Ireland.74 For the rest of the UK there were to be no
such exceptions, and EMI’s announcement seems to have marked the effective end of
the involvement of independent wholesalers. At the same time, the HMV dealership
scheme was also brought to an end, as EMI’s Gramophone Company Ltd.
subsidiary, which still owned the HMV label, was to be merged into EMI Records
Ltd.75 This would pave the way for EMI to directly expand the HMV retail chain in
place of the franchised dealers. The remaining majors swiftly followed in this
direction – Selecta announced that it would be distributing Decca labels only from
July 1966, as well as making Selecta an integrated division of Decca Records, rather
than a subsidiary.76 DGG took the opportunity to partner more closely with its ally
Philips, announcing exclusive distribution of its growing pop label Polydor from its
depots, which were operated on the same site as those of Philips, but with separate
sales staff, in October 1966. Pye was effectively forced into exclusive distribution by
the actions of its competitors, although Selecta and some independents continued to
carry its singles.77 Pye was particularly notable for its ‘van sales’ strategy in the later
1960s in which records were delivered directly to record shops by the company’s
salesmen, continuing to emphasise a close relationship with dealers and allowing
338 K.D. Tennent

small orders to remain feasible, but Pye’s smaller catalogue meant that the company
did not have to emphasise economies of scale and scope as far as EMI or Decca.78
These changes moved the control of rents in the value chain decisively towards
the majors, at a time when creative challenges were increasing from new
independents entering the market, as well as American companies, such as RCA
and Warner, which were increasingly threatening to open up their own independent
organisations in Britain. There was now only one wholesale channel for each release.
Several regional factors were forced out of the record industry as they had no
popular releases to distribute, including Lugtons and Keith Prowse in London and
Martins in Birmingham. The majors used their new monopoly power to coerce
retailers to order records in larger quantities, forcing the retailer to carry more risk
on new releases, the sales potential of which was often unclear. Selecta, for instance,
started charging 5s on orders of less than £10 from 1 August 1966. When interviewed
by Record Retailer about this decision, a company spokesman insisted that too many
shops were simply ordering three or four singles at a time, and expecting delivery in a
few hours. A.W. Green told the trade paper that ‘we handle 73 labels and imports. If
a trader can’t make up an order for £10 from this range, he should not be in
business’.79 The emphasis of Selecta’s policy had changed: previously the speed of
delivery had been emphasised, now scale was considered to be the important factor.
Scale was being introduced alongside scope.
These new rules encouraged the majors, as manufacturers and wholesalers, to
increase scale and scope in distribution by carrying a wider range of products – not
just their own. From 1965 onwards the number of labels, and hence releases, began
to increase rapidly, as new British-based independent labels entered the market,
encouraged by the spare capacity in the distribution networks of the big four – the 10
or so labels charting in 1960 expanded to more than 50 by 1975.80 In addition the
bigger US majors, including CBS, RCA, and Warner-Reprise entered the UK
market directly instead of licensing their product via the UK big four, with Warner
and RCA in particular integrating into production and distribution in their own
right after 1967.81 As Figure 2 shows, the fall in real prices from the earlier 1960s had
continued until 1966 for singles and 1967 for full-price LPs. While prices rallied for a
short period in 1968 and 1969, from the early 1970s onwards prices fell away sharply
despite the high inflation associated with the early 1970s. While LP prices fell by a
quarter between 1968 and 1975, the fall in the real price of singles was perhaps most
dramatic as prices changed relatively little between 1960 and 1971, before dropping
by almost a third, as the competition between labels and retailers intensified.
Recorded music was now within the purchasing power of more consumers than ever
before, and particularly younger consumers with lower disposable incomes yet more
impressionable and experimental music tastes. The emerging genre of progressive
rock which relied on the 12-inch album format as track lengths were often much
longer than 3 minutes, for instance, required a 16–25 demographic which could
afford to purchase the albums.82 Indeed, Figure 3 points to the increasing
importance of album sales, which started to pick up in the 1967–69 period and
continued to grow through the 1970s, on both the traditional LP format and the
newly introduced cassette and cartridge tape formats.
It is worthwhile to note at this point that other consumer markets were
experiencing disruption resulting from a similar combination between market forces
and the abolition of RPM, and were seeing changes to their distributive structure.
Ward’s contemporary study into the effect of RPM points in particular to similar
 Business History 339

trends in the domestic appliances market, which had seen the number of UK
manufacturing outlets expand by 37% between 1958 and 1963, driven by the post-
war consumer boom.83 Excess capacity increased competitive pressure; Ward points
to Hoover’s decision to abandon RPM entirely in June 1965 as evidence of this.
After the legal abolition of RPM in that industry in 1967, Ward notes that
manufacturers changed their pricing policy, offering discounts directly to retailers
that had previously been supplied by independent wholesalers. Account structures
were also changed to favour customers making large individual orders; previously
discounts had been granted on an annual basis depending on orders made over a
year-long period.84 A Chandlerian distribution narrative was emerging in this
industry also – except that music remained different as the ability of a distributor to
carry a wide range of lines remained more important – thus while independent
wholesalers were becoming less important in the domestic appliance industry also, in
music the record companies were more actively embedding themselves as wholesalers
for independent labels.
The first of the new wave of small labels to enter the market was Andrew Loog
Oldham’s Immediate label, which was announced in August 1965. This was the first
time that a major, in this case Philips, had agreed to press and distribute for an
independent that it did not take creative control over.85 Immediate was therefore
able to concentrate resources on the parts of the record-making process supported by
its capabilities, such as the ‘A&R’ process (the choosing of acts), recording and
producing, and promoting the end product. Philips for its part contributed by
pressing the records to its technical standards, and ensuring national distribution, as
it now had to for its own catalogue. Philips also helped to promote the records to the
trade. Immediate did not enjoy massive chart success, managing only a 0.7% share in
1966, but later firms started by independent producers such as Mickie Most’s Rak
Records (distributed by EMI) and Jonathan King’s UK Records (distributed by
Decca) did, claiming 2.7% and 1.5% respectively of a much more diverse market in
1974. This new approach also helped US independents gain access to the UK market
and sign UK talent without having to make substantial investments in production
and distribution themselves. Bell Records, distributed by EMI, claimed a 3% share
of the charts in 1972, rising to 6% by 1975, having signed popular British artists
including the Bay City Rollers, Gary Glitter, and Showaddywaddy.86 Table 1 gives a
listing of the higher profile deals between majors and independent labels. Perhaps the
most important role carried out by the independent companies on their own was
promotion to the consumer, which was made dramatically easier following the
changes to the structure of the radio broadcasting industry made in 1967, which saw
the creation of the music-based BBC Radios 1 and 2.87 In response, in 1968
Luxembourg moved away from its sponsorship model towards spot advertising,
despite opposition from the majors.88 These changes made the promotion of records
through radio more atomistic, as promoters representing all labels could lobby disc
jockeys on either the BBC or Luxembourg networks to give their discs airtime. The
introduction of Independent Local Radio in the early 1970s, on a spot advertising
basis, further reinforced this, as promoters could now even choose particular parts of
the country to target.
EMI went furthest in fully integrating into distribution in the late 1960s and early
1970s by centralising distribution at its factory in Hayes, Middlesex, and closing its
regional depots. In August 1966 EMI took the first step in this direction by closing
its Birmingham and Croydon depots, announcing that these areas would now be
340 K.D. Tennent

Table 1. Distributing majors and labels.

Distributing major Label

EMI ABC Immediate (after 1967)
Beacon (after 1968) MGM
Bell Rak Records
Brit Records Stax (after 1968)
Bus Stop Records Tamla Motwon
CBS (1964–71) United Artists
Delyse (c.1966–68) Waverley
Disneyland Young Blood
Dunhill (after 1968)
Selecta (Decca) Atlantic (until 1966) Monument
Delyse (c. 1968–69) Spot
RCA (until 1968) UK Records
MCA
Philips* Immediate (1965–67) Roulette
Liberty Toast
Major Minor Track
Page One Veejay
Planet
Pye A&M Major
Argo Middle Earth
Checker Reprise (until 1971)
Chess Tepee (after 1968)
DJM Warner Bros (until 1971)
Polydor* Alp Kama Sutra
Atlantic (1966–69) Marmalade
Clan Reaction
Elektra (until 1970)
Helidor

*Shared depots until 1972 merger into Polygram.

Notes and sources: This list is not exhaustive but includes some of the higher profile labels known to be
pressed and distributed via a major in the UK c. 1965–70. It is based on a survey of label names mentioned
as being subject to such a deal by Record Retailer between 1965 and 1970, although as time goes on these
deals become harder to track as they became more routine and less novel.

supplied by road from Hayes.89 By 1968 EMI had completely closed its regional
depot networks, although local sales teams were retained, and supplied the whole of
mainland Britain from Hayes via W.H. Smith’s newspaper train network.90 In 1970
EMI committed further to the railways, entering into a five-year contract with
British Rail’s Express Parcels service, making possible the delivery of an order to
anywhere in the UK from Hayes within 24 hours.91 While smaller retailers could also
be supplied, this obviously worked well for the supply of W.H. Smith, which had
begun stocking budget records, such as EMI’s ‘Music for Pleasure’ range, even in
stores which did not have a formal record department.92 EMI also integrated further
into retail from 1965 onwards, purchasing six record shops in London to form the
nucleus of the HMV chain, which was developed into a national network by the end
of the 1970s.93 Pye also moved into retail with its purchase of the 15-store Alex
Strickland chain in 1969, which included the prestigious Soho Record Centre,
although it did not invest in retail as far as EMI.94 In 1972, EMI completed its
investment in production and distribution facilities when it spent £4 million on a
whole new integrated pressing and distribution complex at Hayes, to replace its
 Business History 341

existing factory, opened in 1911, at which prospects for further development were
limited as it was hemmed in by other factories belonging to the EMI group.95
A further attempt by EMI to take control of the value chain was the experiment,
pioneering in the UK, with the rack jobbing of full price records in 1966.96 Rack
jobbing was a retailing technique, already popular in the industry in the US, which
allowed retailers without specialist expertise to carry records, as representatives of
EMI would oversee the restocking of the rack for retailers. This took control over
which records were stocked out of the hands of the retailer and allowed EMI more
control over which records were placed in stores, often in places such as greetings
card shops and supermarkets where, for instance, older customers who found local
record stores intimidating could be reached. This also allowed EMI to closely control
the retail placement of artists, something which was out of their hands in chain or
independent record stores, in which they could only recommend how stock was
displayed, or even ordered. From 1968 Decca and Pye, as well as some independents,
joined EMI in a rack jobbing consortium known as Record Merchandisers Ltd.,
although Record Merchandisers’ network remained centralised on EMI’s Hayes
facility. Philips and Polydor had attempted to set up their own racking scheme but
joined Record Merchandisers in late 1969.97 The delegation of authority over
wholesaling to Record Merchandisers Ltd. meant that the majors could no longer
easily restrict which retailers could stock records. Retailers wishing to carry a full
range would continue to be supplied via the traditional wholesale channels; those
looking to stock only fast turnover chart and budget material at minimal cost could
do so via Record Merchandisers. The Record Merchandisers business grew steadily
though the 1970s, claiming a 12% market share by 1976, although the operation did
not always run smoothly.98 In 1973 the supermarket chain Fine Fare announced that
it was ceasing the sale of full price records, claiming that RM’s operation was
becoming inefficient because staff were spending more time re-ordering records,
while replenishment was supposed to be RM’s responsibility.99 It is clear, however,
that RM played a crucial role in the longer term shift of music retailing away from
traditional retailers, particularly as the majors would have refused to supply a
retailer such as Fine Fare 10 years earlier. By far the most important supporter of the
RM scheme was Woolworths, which introduced rack jobbing in 63 outlets in 1971,
expanding to 863 by 1976.100

Conclusion
Today the recorded music industry, worldwide as well as in the UK, is dominated by
three large groups: Universal, Sony BMG, and Warner. This process of
consolidation based on Chandlerian scale and scope economies began in the 1960s
as volume pop sales began to accelerate while majors became increasingly savvy at
targeting separate segments of the pop market through specialist labels. Such labels
could enjoy a degree of independence, or even complete independence from the
majors, but the majors still enjoyed overriding scope economies in the production
and distribution of the record and tape media, making wide expansion of the
catalogue possible. While the upstream record industry de-integrated, the down-
stream industry became subject to more internalisation and was increasingly
Chandlerian. There was more competition than pre-1965, but paradoxically the
majors had taken more control over the system as they sought to mitigate the loss of
control threatened by the abolition of RPM.
342 K.D. Tennent

The establishment of control over the wholesaling and distribution system,

starting from the mid-1950s, was key. The music industry demonstrates that
Chandlerian ideas around distribution were put into use to some extent in the
UK after the Second World War. The post-war period is largely beyond the
scope of Chandler’s 1990 study, but the conclusion to the book does hint that
American firms continued to invest in the three prongs of production,
management, and distribution while British firms were left playing catch-up.
Within the distribution prong, if music is a reliable indicator (and it was a growth
industry in the 1950–80 period), then catch up they did. More general
independent wholesalers were edged out of the market by the ‘big four’
manufacturers, which could cut transaction costs by offering market-specific
distribution capabilities. Before 1965 the record companies did this by
emphasising economies of scope and the speed of their response to small
retailers. After 1965, and after 1969 with the possibility of refusing to supply
shops that would not respect resale prices removed, economies of scale were more
actively introduced to the equation in order that the record companies, rather
than large-scale retailers, could benefit from them. This is not to say that speed
and scope did not remain important; they did – but a new paradigm emerged in
which the faster movement of goods at a greater scale became more important.
Greater scale in the production of physical media also allowed for greater scope,
as a wider variety of music could be made available within that scale. To carry
the same range in 1966 as they did in 1964, a retailer would have to establish an
account with the wholesale divisions of all four major record companies and then
be able to provide orders of sufficient scale to all four to satisfy minimum order
conditions. Unless they were prepared to accept the significant loss of control
over merchandising involved in rack jobbing, retailers themselves were being
expected to invest in scale and scope economies or exit the industry. In the music
industry at least, once the abolition of resale price maintenance forced their hand,
British-based firms did make a real effort to invest in distribution, radically
reshaping their industry. The new scope economies combined with improved
distribution and retail de-skilling meant that a wider choice of music became
available in more locations than before, while real prices to the end consumer fell.
An industry system was thus established which survived the introduction of the
compact disc in the 1980s, and persisted until competition from electronic music
distribution became a serious threat in the late 2000s.

Notes
1. Negus, Music Genres and Corporate Cultures; Negus, Producing Pop; Peterson and
Berger, ‘Cycles in Symbol Production’; Shuker, Concepts in Popular Music; Shuker,
Understanding Popular Music.
2. Bakker, ‘The Making of a Music Multinational’; Gourvish and Tennent, ‘Peterson and
Berger Revisited’.
3. Dintenfass, The Decline of Industrial Britain; Broadberry, Market Services and the
Productivity Race; Broadberry, The Productivity Race; Owen, From Empire to Europe.
4. Owen, From Empire to Europe, 172–207, 253–94.
5. Gourvish and Tennent, ‘Peterson and Berger Revisited’, 206.
6. Ibid., 205.
7. Chandler, Scale and Scope; Lamoreaux et al., ‘Against Whig History’; Langlois,
‘Chandler in a Larger Frame’.
8. Chandler, Scale and Scope, 30–1.
9. Ibid., 294.
 Business History 343

10. Hannah, Strategic Games, Scale and Efficiency, 30–5.

11. Godley, ‘Foreign Multinationals and Innovation in British Retailing’; Morelli, ‘Modern
British Retailing in the Late 20th Century’; Shaw, Curth, and Alexander, ‘Selling Self-
Service and the Supermarket’.
12. The Times, 3 May 1969, 21.
13. Godley, ‘Foreign Multinationals and Innovation in British Retailing’, 90.
14. Shaw, Curth, and Alexander, ‘Selling Self-Service and the Supermarket’, 573.
15. Da Silva Lopes, ‘Brands and the Evolution of Multinationals in Alcoholic Beverages’,
10.
16. Chandler, Scale and Scope, 354–6.
17. Ibid., 395.
18. Decca was originally founded in 1832 as Barnett, Samuel and Sons, which was
incorporated as a limited company in 1901. The company began manufacturing
gramophone players under the Decca name in 1914, and when floated by E.R. Lewis &
Co. in 1928, changed its name to The Decca Gramophone Company Ltd. See ‘The
Decca Gramophone Company Ltd.’, prospectus advert for share issue, The Times, 24
September 1928, 23. At this point the company claimed a 21.9% share of the hardware
export market in 1927. In January 1929, after attempting to interest Decca’s board,
Lewis bought another record company, Duophone, which owned the New Malden site
which would become Decca’s main pressing plant, before making an offer for Decca
itself, which was accepted. E.R. Lewis became Decca’s Managing Director in September
1931, supposedly on a temporary basis. Lewis started to consolidate the industry,
purchasing Warner-Brunswick Records in 1932 to gain access to American recordings
by artists such as Bing Crosby and Al Jolson, and reduced Decca’s capital to survive the
depression. Gourvish, ‘Were the Giants of the British Music Industry Chandlerian or
Not?’, and ‘Wally Peterson Relates the Remarkable Saga of One of the Most
Outstanding Personalities in the Record Industry’, Record Mirror, 28 December 1957,
33.
19. Frankland, Radio Man, 217–30.
20. Ibid., 258. ATV completed their purchase of Pye Records in 1966, with the purchase of
the remaining stock of Pye of Cambridge and the shares of the other partner, Caledonia
Investments for £2.1 million (Financial Times, 13 July 1966, front page; Record Retailer,
14 and 21 July 1966, both front page).
21. Record Retailer, 4 March 1963, 7, and 21 July 1966, front page; The Times, 18
December 1973, 19.
22. Der Volkswirt, 1 March 1963, 356.
23. Bakker, ‘The Making of a Music Multinational: PolyGram’s International Businesses’.
24. Financial Times, 26 February 1980, 25.
25. Record Retailer, 3 March 1966, front page.
26. Tennent, ‘Business Archives’, 55–6.
27. Gourvish and Tennent, ‘Peterson and Berger Revisited’, 193–5; Peterson and Berger,
‘Cycles in Symbol Production’.
28. Gourvish and Tennent, ‘Peterson and Berger Revisited’, 200–1.
29. Ansoff, Corporate Strategy, 108–11.
30. Philips NV, ‘Annual Report and Accounts’ 1954, 42.
31. Bakker, ‘The Making of a Music Multinational: The International Strategy of
Polygram’, 15.
32. Record Mirror, 28 December 1957, 95.
33. Electric and Musical Industries Ltd., ‘Annual Report and Accounts’, 1958, 19, Philips
NV, ‘Annual Report and Accounts’, 42.
34. For instance, as late as 1963 Decca’s annual report talked about popular releases in
less than a quarter of the space allowed for music-related activity, despite the
outstanding success of the company’s popular releases, including Telstar by the
Tornadoes, which was reported to have sold 3 million copies worldwide. Financial
Times article dated 12 November 1963, appended to the Decca Annual Report and
Accounts 1963.
35. Decca’s 1957 annual report listed Selecta (Gramophones) Ltd. of London, Duwe
(Wholesale) Ltd. of Manchester, Appletons (Newcastle) Ltd., and Selecta (Midlands)
344 K.D. Tennent

Ltd. of Leicester as wholesale distributors of records and domestic electrical goods

(p. 14).
36. Due to its connections with The Beatles, perhaps the most famous electrical and record
shop was North End Music Stores (NEMS) of Liverpool, owned by the Epstein family.
NEMS opened its second shop in central Liverpool in 1960 – this four-floor emporium
stocked records, record players, radiograms, television and radio, and domestic electric
appliances (Record Retailer, 16 June 1960, 16). The numbers of stores carrying records
as their main trade seems to have increased during the early 1960s. In 1961 Roy Parker
noted that the number of ‘record shops’ near his office had increased from two to five in
the last two years (Record Retailer, 28 July 1960, 5); in 1964 Philips introduced a
window dressing service for its customers in the south of England, suggesting that
records were important enough to these customers to merit a specific display (Record
Retailer, 25 June 1964, 1).
37. For instance, early Elvis Presley releases were marketed in the UK on HMV (Record
Mirror, 4 August 1956, 2).
38. Record Retailer, 8 July 1965, 16.
39. Record Retailer, 1 June 1961, 2.
40. The Decca Record Company Limited, 1957, 14.
41. Record Retailer, 21 March 1963, 6.
42. Record Retailer, 7 February 1963, 32.
43. Record Retailer, 7 and 28 March 1963, 7 and 11.
44. Record Retailer, 4 February 1965, front page.
45. The Financial Times, 10 August 1960, 9.
46. 20 September 1958, 953–4.
47. Melody Maker, 22 August 1959, front page.
48. H.R. Taylor advertised the distribution of discs from small specialist labels such as
Audio Fidelity, Belcantodisc, Cetra, Gala Records, Instant Language Courses, Saga Pre-
Recorded Tapes, and Triumph in the same advertisement (Record Retailer, 23 June 1960,
17).
49. The Economist, 20 September 1958, 953–4.
50. Record Retailer, 1 June 1961, 7.
51. The Economist, 13 August 1960, 669; Record Retailer, 11 August 1960, 5.
52. Record Retailer, 21 April 1960, 7.
53. Record Retailer, 10 March 1960, 29.
54. Record Retailer, 24 March 1960, 18, 23 June 1960, 2, and 24 November 1960, 5.
55. Record Retailer, 11 August 1960, 6.
56. Repsch, The Legendary Joe Meek: The Telstar Man, 130–72.
57. Melody Maker, 12 September 1959, 1.
58. Record Retailer, 9 February 1961, 5.
59. Record Retailer, 25 April 1963, 11, and 21 January 1965, front page.
60. Record Retailer, 27 February 1964, 8.
61. Record Retailer, 26 March 1964, 20.
62. In the EMI Annual Report 1962 Sir Joseph Lockwood noted that there were over two
million domestic tape recorders in the UK (1962), 12.
63. The 1954 Television Act which established ITV had banned the established US practice
of advertisers sponsoring programmes, while ‘spot advertising’ was restricted to an
average of six minutes per hour. ‘Advertising magazines’ of up to 15 minutes were
allowed initially but were phased out by 1960, as they took up time more valuably used
for other programmes Sendall, Independent Television in Britain: Expansion and Change,
106; Sendall, Independent Television in Britain: Origin and Foundation, 98–103. Record
companies could thus not make TV programmes exclusive to their own label, although
extensive use was made of pop music programmes produced by both BBC and ITV. The
UK lacked any legal land-based form of commercial radio until the 1970s, while the
BBC strictly limited the amount of time given to popular music on radio, prioritising
classical music and speech radio.
64. Electric and Musical Industries Ltd., ‘Annual Report and Accounts’ 1963, 15.
65. Record Retailer, 10 March 1960, 6, and 1 September 1960, 5.
66. Record Retailer, 27 February 1964, 8.
 Business History 345

67. For instance, the 5 March 1964 edition of Record Retailer listed 43 new releases that
would shortly be heard on Luxembourg, as well as a listing of the records to be heard on
Decca’s flagship Luxembourg programme Teen and Twenty Disc Club, hosted by Jimmy
Saville on 11 March, a listing of records to be featured on Associated Rediffusion TV’s
Ready Steady Go on 6 March, and on BBC TV’s Juke Box Jury on Saturday 29
February.
68. The Economist, 20 July 1963, 57.
69. Wilson, British Business History, 1720–1994, 198.
70. Record Retailer, 30 July and 6 August 1964, both front page.
71. Record Retailer, 13 May 1965, front page; The Times, 3 July 1969, 21.
72. Record Retailer, 4 February 1965, front page.
73. Record Retailer, 1 July 1965, front page.
74. Record Retailer, 8 July 1965, front page, and 11 October 1965, 10–11.
75. Record Retailer, 8 July 1965, 16.
76. Record Retailer, 30 June 1966, front page.
77. Record Retailer, 13 October, 1966, front page.
78. Record Retailer, 22 January 1969, 6–7.
79. 14 July 1966, front page.
80. Gourvish and Tennent, ‘Peterson and Berger Revisited’, 198.
81. CBS took over Oriole in 1964, pressing its own discs in the UK, but relying on the UK
big four to distribute. In March 1966 CBS announced a deal to distribute exclusively
with EMI (Record Retailer, 24 September 1964, 1, and 3 March 1966, 1). As noted by
Gourvish and Tennent (‘Peterson and Berger Revisited’, 193), RCA entered the UK in
stages; its releases had long been licensed to Decca in the UK, and its US parent firm
RCA Victor started to source UK talent in September 1966. By 1968 the company was
handling its own release scheduling, promotion, and advertising in the UK, before
opening its own pressing plant at Washington, County Durham, in 1969 (Record
Retailer, 22 September 1966, and 1 November 1967, 1). Warner’s material was licensed
to Pye in the mid-1960s but the company started marketing and possibly pressing on its
own behalf in the UK when its contract with Pye ran out in September 1968. Certainly
by 1969 Warner was co-operating with Island, Liberty UA, and A and M to organise
independent trade shows (Record Retailer, 1 June 1967, 1, 8 November 1969, 52).
Warner’s US parent, the Kinney Group, which also owned Atlantic and Elektra, then
moved to set up a new UK distributing group with CBS in 1971 (Record and Tape
Retailer, 20 March 1971, front page).
82. Many prog rock bands did not release singles at all, and many of their albums were
designed to be listened to in sequence, necessitating the 12-inch format. Jethro Tull’s
1971 album Aqualung, for example, included five tracks more than 4 minutes long, and
the title track was 6 minutes 34 seconds long.
83. Ward, The Distribution of Consumer Goods, 195.
84. Ibid., 201–4.
85. Record Retailer, 12 August 1965, front page.
86. Music Week, 7 July 1973, 40.
87. The Times, 21 December 1966, 5
88. Record Retailer, 3 January 1968, 18.
89. Record Retailer, 18 August 1966, front page.
90. This was a surprising development in a period when the railways were experiencing
extensive rationalisation and industrial action, especially as EMI was affected by an
industrial dispute on the railways far more than Selecta, Pye, and CBS which mostly
relied on van-based services (Record Retailer, 26 June 1968, front page). According to
Lockwood’s interview with Record Retailer in August 1969, EMI had offered Decca the
chance to participate in its rail-based distribution project (16 August 1969, 11).
Lockwood claimed that he was inspired to distribute records by rail after seeing how
effective newspaper trains were during a visit to the Times: ‘Yes, it was after I had
dinner at the Times that I decided we should do this. It would never have been done if I
had not had John Fruin to carry it out. He believed in it. I took him along to see British
Railways. We went to see the deputy chairman. I told him we had great faith in the
railways. He nearly fell over backwards.’
346 K.D. Tennent

91. Record Retailer, 14 March 1970, front page.

92. In addition to opening 86 full record departments, W.H. Smith was now stocking
budget records soon to include EMI/Paul Hamlyn’s ‘Music for Pleasure’ range in 289
other stores. Budget records did not require a specialist staff presence (Record Retailer,
16 February 1965, 5).
93. Record Retailer, 22 September 1965, front page. EMI also had the long-established
HMV store in Oxford Street.
94. Record Retailer, 26 January 1969, front page.
95. EMI News, April/May 1972, special supplement; Music Week, 10 June 1972, front page,
and 8 July 1972, advertising insert.
96. Record Retailer, 20 October 1966, front page.
97. Record Retailer, 17 April 1968, 19 June 1968, 10 July 1968, 29 November 1969, all front
page.
98. Financial Times, 12 May 1976, 13.
99. Fine Fare had decided to concentrate on budget records supplied by Music for Pleasure
and Pickwick only. Another chain, Pricerite, had also recently terminated its
arrangement with Record Merchandisers for full price records. Tesco had apparently
also stopped selling full price records recently (Music Week, 11 August 1973, front
page).
100. British Phonographic Industry, BPI Year Book 1976, 32. EMI had long refused to
supply Woolworths through direct wholesale due to its reputation as a discounter.

Notes on contributor
Kevin D. Tennent was appointed Lecturer in Management at The York Management School in
January 2012, joining from the Open University Business School. He had previously worked at
the LSE’s Business History Unit, where he had helped with the ESRC supported project
‘Enterprise and Creativity: The British Popular Music Industry 1950–75’, ref. RES-062-23-1100.

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Appendix
Table A1. Shares of revenue from record sales, 1976.

Full price Budget LP Pop single Cassettes

% pop LP (£3.00) (£1.25) (£0.65) (£3.25)
VAT 8 8 8 8
Dealer margin 33 33 33 30
Distribution 11 11 12 11
Artist royalty 13 6 13 12
Copyright royalty 6 6 6 6
Sleeve (box þ liner) 4 6 2
Disc and pressing (duplication) 9 18 10 13
Marketing 6 3 9 7
Recording (studios) 3 1 3 3
Other record company overheads 4 6 4 5
Record company profit 3 2 2 3
100 100 100 100

Source: British Phonographic Industry Yearbook 1976, 199. Approximation based on BPI research.
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