Hard times and the entertainment industry

Perhaps you remember Grafonola, who posted some worthy comments on Mish’s weblog about life during the Great Depression. Here’s another, concerning the entertainment industry.

GPB, you said:

“I keep reading on here that entertainment (type stocks) are big during a de/recession. It was in the thirties for movies and music."

Not quite true. The moving picture business did very well in 1930 and 1931. In fact it was the only real growth part of the economy. By 1932, however, attendance at the pictures was dropping, as folks’ small cash reserves dwindled towards the vanishing point. 1933 was an absolute disaster. 

As for the music industry, the Depression very nearly killed the phonograph and record business. From industry-wide sales of 150,000,000 disc records in 1928, industry-wide sales of phonograph records crashed to a low of 6,500,000 in 1932, and 8,000,000 in 1933./ Were it not for the advent of Repeal, and the ascendancy of coin phonographs (Juke-boxes) in bars and lounges it is probable that the phonograph industry would have entirely disappeared. 

The Radio industry presents a slightly different picture. Network radio was in its infancy as the Depression descended over the country. the great growth spurt of this industry happened to coincide with the worst years of the Depression. 

I suspect that this was an anomaly, though, for sales of actual radio receivers crashed at this time. The Depression forced radio manufacturers to develop ever cheaper, smaller products. Gone were the heavy chassis, generous transformers, and fine cabinetwork of the 1920’s. The only way that manufacturers survived in the 1930’s was through a continual cheapening of product, through the introduction of "midget" and "cigar-box" sets. Unit prices dropped for an average of $169.00 in 1929 to an average of $49.00 by 1936.

Of course this drive to cheapen the product did also lead to a great advancement in radio technology, as the engineering departments of the various manufacturers learned how to achieve greater performance at less cost. A $35.00 midget of 1934 vintage was a much better performer, in selectivity, sensitivity, and fidelity, than ‘most any $275.00 console of 1929. 

Despite the great technical advances of this period, however, few radio manufactures of the 1930’s were profitable. Zenith and Philco were, indeed quite profitable all through the decade. The RCA largely survived on surpluses accumulated in the salad days of the 1920’s, and on patent license fees. Most other manufacturers operated on the brink of oblivion, until the coming of war contracts with the advent of lend-lease in 1940.

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