ZON-O-PHONE Registry Project
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Zon-o-phone / Zonophone
From our perspective, 100 years + from the start of the disc record industry, looking backwards we imagine those early days to be a 'romantic' time. In reality, it was a hard business, and then, as now, a lot revolved around money. There are various interpretations of how in 1899 the meltdown of the original industry occurred, resulting in Berliner, the inventor of the Disc record being barred from producing his own invented product in the USA. New companies, primarily Zonophone and Victor evolved as a result of the litigation.
Essentially what happened was that Berliner needed a strong marketing & sales strategy and to this end formed an alliance with Frank Seaman (who had formed the National Gramophone Company) to handle the marketing and sale of Berliner's product line. The fifteen-year contract stated that Frank Seaman's National Gramophone Company would be the exclusive distributor of the product line and handle the advertising campaign. The advertising campaign and methods were excellent and Berliner sales rocketed.
However, Frank Seaman was fronting all the money for advertising and distribution (except in eastern Pennsylvania), but being bound by the contract to pay artificially inflated wholesale costs for the Johnson machine? Seaman was also manufacturing his own machines, and urged Berliner to buy his Zon-o-phone rather than machines from Eldridge Johnson. Berliner had a good working relationship with Johnson, as well as financial ties to Eldridge Johnson, and thus the Berliner group were reluctant to approve outside sources of gramophones, despite better quality and lower prices. Since Berliner would not buy the Zon-o-phone, Seaman started selling them himself, as allowed in their contract.
Section Eight of the contract, allowed Seaman legally to manufacture and sell less expensive goods of comparable quality. This of course did not suit the Berliner group who moved to prevent the continued production of the cheaper Montross, Gibson machine, and Zon-o-phone machines, thus abrogating the contract.
Profits were good and getting better for Berliner group, Frank Seaman was stuck to the fixed contract until 1911 and Berliner had put immense pressure on Seaman to stop production of the cheaper machines, which was contrary to their agreement. Seaman was looking for a way out of the contract. In essence the Berliner company was somewhat underhanded and short-sighted in their business practices.
Berliner had felt that Seaman's actions were a violation of their original contract and he considered it null and void, Seaman retorted with an injunction against Berliner stating that he was the only one who could purchase Berliner machines through their contract. This challenge was upheld in court. The same contract that bound Seaman to Berliner also bound Berliner to Seaman.
By 1898, competition between Berliner and its biggest rival Columbia was quite fierce. Columbia's head, Edward Easton decided to put their best and sharpest lawyer, Phillip Mauro, on the case.
Columbia Graphophone's fortunes were based on was the Bell/Tainter patent of 1886. The patent specified that a "needle moved by a groove" played the record. This was very simplified description.
Mr. Mauro watched a Berliner machine play a record. He saw that the needle went into a groove on the rotating record and the groove moved the needle. While Bell and Tainter had not designed their system that way, Mauro felt that the wording of the patent was broad enough to attack. He filed an injunction against Berliner and against Frank Seaman and the National Gramophone Company .
Seaman knew that there was no true patent infringement by the Berliner Gramophone, but as he was no longer their biggest fan, he saw it as advantageous to stay silent on the matter. He formed a new company he named the 'Universal Talking Machine Company.
Seaman was also having secret meetings with Columbia and Phillip Mauro. The deal was that royalties would be paid to Columbia on Zon-o-phone sales (on the Columbia patent). In late 1899 Seaman made the announcement in the press stating: "The National Gramophone Company will now sell Zon-o-phone Gramophones and Disc Records. The Zon-o-phone is a replacement for the Berliner Gramophone and Zon-o-phone records are a replacement for Berliner Gramophone Records."
Seaman then publicly, obviously on behalf of Columbia, announced that the Berliner Gramophone and records infringed on the patents of the Columbia Phonograph Company. Columbia then sued Berliner for infringement. Conveniently Columbia left the Zon-o-phone Company alone.
With this bizarre legal powerplaying, the Berliner Company was forced to stop production. They would disallowed to produce and sell the product that Berliner had invented. Berliner moved his company to Montreal, Canada.
The success of Zon-o-phone was by no means guaranteed. Though the machines were mechanically excellent, and superior in design to the competitors, too many different models were introduced at once which resulted in the company being on very thin financial ice. There was a first bankruptcy in 1901.
Johnson and Berliner counter-sued, and in 1901, emerged victorious in court - prompting the name of their new combined company, 'Victor', owned by Eldrige Johnson.
Further legal actions dragged on until 1903, when all of the United States and Latin American assets of Zon-o-phone were obtained by Victor, and the Europe and British Commonwealth assets by the Gramophone & Typewriter Company (HMV).
Victor & HMV continued use of the "Zonophone" name to market cheaper records - till 1910 in the USA, and in various forms and combinations in the UK and parts of Europe on and off till the early 1980s.