Manufacturing gramophones but not records is like selling razors but not consumable blades.”
This was the famous conclusion of Edward Lewis, a 29-year-old Cambridge grad and financial consultant. It was early 1929, and he’d just completed a market study for Decca Gramophone Company, a struggling gramophone maker. When his demoralised clients didn’t take his practical advice, Lewis decided to do it himself. He rounded up a group of investors and bought them out.
Re-founding Decca in 1929 as a proper record label with a simplified name, the young entrepreneur couldn’t have picked a worse time. The archaic gramophone industry had already been hit severely throughout the 1920s by a newer invention called radio. But it was the Wall Street Crash later that October which sounded the death knell for most record companies. This was the first record crash, eerily similar to the recent one. For over a decade in the inter-war period, it looked like buying disc records was an obsolete business. America’s already struggling record business was decimated from an annual output of 100 million records in 1927 to just 10 million in 1930. Amazingly, it was from this crater of bankruptcies, fire sales and existential crisis that little Decca, an English start-up, became the hottest label in the world.