Johnny Mercer first suggested the idea of starting a record company while he was golfing with Harold Arlen and Bobby Sherwood. He told them, "I’ve got this idea of starting a record company. I get so tired of listening to the way everyone treats music. I keep feeling they’re selling out. And I don’t like the way artists are treated either. Bing Crosby isn’t the only one who can make records. I don’t know, I think it would be fun." By 1941, Mercer was not only an experienced songwriter, but a singer with a number of records to his name. Mercer next suggested starting a record company to his friend Glenn Wallichs while Mercer was visiting Wallichs' record store. Wallichs responded, "Fine, you run the record company and find the artists,' and Mercer added, "and you run the business."
On February 2, 1942, they met with Buddy DeSylva at a Hollywood restaurant to ask if Paramount Pictures would invest in the new record company. DeSylva said no, but that he would, and he gave them a check for $15,000. On March 27 the three men got a statement notarized that they have applied to incorporate Liberty Records. In May they amend the application to change the name to Capitol Records. (citations for Feb. 2 to July 25, 1942, see individual day dates at #
On April 6, 1942, Johnny Mercer supervised Capitol's first recording session, recording Martha Tilton singing 'Moon Beams". On May 5, Bobby Sherwood and his orchestra recorded two tracks. On May 21, Freddie Slack and his orchestra recorded three tracks, one with just the orchestra, one with Ella Mae Morse—"Cow Cow Boogie', and one with Mercer—"Air–Minded Executive".
On June 4, Capitol Records opened its first office in a second-floor room south of Sunset Boulevard. On the same day, Wallichs presented the first free record to a Los Angeles disc jockey named Peter Potter. Potter was so pleased Wallichs decided to give free records to other DJs, becoming the first in the business to do so.
On June 5, Paul Whiteman and his Orchestra recorded four sides for Capitol. On June 12, the orchestra recorded five more songs, including one side with Billie Holiday. On June 11, Tex Ritter recorded “(I Got Spurs That) Jingle Jangle Jingle” and “Goodbye My Little Cherokee” at his first Capitol recording session. They would become record #110.
On July 1, Capitol Records released its first nine records:
The earliest recording artists included co–owner Johnny Mercer, Margaret Whiting, Jo Stafford, Paul Whiteman, Martha Tilton, Ella Mae Morse, the Pied Pipers, and Paul Weston and His Orchestra. Capitol's first gold single was Morse's "Cow Cow Boogie" in 1942. Capitol's first record album was Capitol Presents Songs By Johnny Mercer, a three 78-rpm record set with recordings by Mercer, Stafford, and the Pied Pipers, all with Paul Weston's Orchestra.
Capitol was the first West Coast label, competing with RCA-Victor, Columbia and Decca, all based in New York. In addition to its Los Angeles recording studio Capitol had a second studio in New York City, and on occasion sent mobile recording equipment to New Orleans, Louisiana and other cities.
By 1946, Capitol had sold 42 million records and was established as one of the Big Six record labels. It was also that year that writer–producer Alan W. Livingston created Bozo the Clown for their new children's record library. Some notable music appreciation albums for children by Capitol during that era included Sparky's Magic Piano and Rusty in Orchestraville.
Capitol released a few classical albums in the 1940s, some featuring a heavily embossed, leather-like cover. These appeared initially in the 78-rpm format, then on some of Capitol's early LPs (33-1/3 rpm) which first appeared in 1949. Among the recordings was a unique performance of the Brazilian composer Heitor Villa-Lobos' Choros No. 10 with a Los Angeles choral group and the Janssen Symphony Orchestra (1940-1952) conducted by Werner Janssen, Symphony No. 3 by Russian composer Reinhold Moritzovich Glière, and Cesar Franck's Symphony in D minor with Willem Mengelberg and the Concertgebouw Orchestra. In 1949, the Canadian branch was established and Capitol purchased the KHJ Studios on Melrose Avenue next to the Paramount Pictures lot in Hollywood. By the mid-1950s, Capitol had become a huge company, concentrating on popular music.
The 1950s roster now included Frank Sinatra, Judy Garland, The Andrews Sisters, Jackie Gleason, Jane Froman, Ray Anthony, Andy Griffith, Shirley Bassey, Merle Travis, The Kingston Trio, Dean Martin, The Four Freshmen, Al Martino, Dinah Shore and Nancy Wilson. There were also some notable comedy recordings, including several by Stan Freberg and the Yiddish-dialect parodies of Mickey Katz. The label also began recording rock and roll acts such as The Jodimars and Gene Vincent.
Many children became familiar with Capitol Records through the release of a number of Bozo the Clown albums, which featured 78-rpm discs and full color booklets which the children could follow as they listened to the recorded stories. Although there were a series of Bozo the Clowns on various television stations, Capitol used the voice of Pinto Colvig, who was also the voice for Walt Disney's cartoon character Goofy.
In 1955, the British record company EMI acquired 96% of Capitol Records stock for $8.5 million. Soon afterward, EMI built a new studio at Hollywood and Vine to match its state-of-the-art Abbey Road Studios in London — see the Capitol Tower below. EMI's classical Angel Records label was merged into Capitol in 1957. Some classical recordings were issued in high fidelity and even stereophonic sound on the Capitol label by William Steinberg and the Pittsburgh Symphony Orchestra, Leopold Stokowski with various orchestra (including the Los Angeles Philharmonic Orchestra), and Sir Thomas Beecham and the Royal Philharmonic Orchestra, as well as light classical albums by Carmen Dragon and the Hollywood Bowl Orchestra and a series of albums of film music conducted by leading Hollywood composers such as Alfred Newman. Eventually, most of the classical recordings were released exclusively on the Angel and Seraphim labels in the U.S. EMI reissued many of the historic Capitol classical recordings on CD.
After initial resistance to issuing records by The Beatles who were signed to sister EMI label Parlophone, Capitol exercised its option in November 1963 and helped usher in Beatlemania in 1964. (The Beatles' earliest US issues had been on the small Vee-Jay label.) Capitol's producers significantly altered the content of the Beatles albums (see "Record Altering", below.), and, believing the Beatles' recordings were sonically unsuited to the US market, added equalization to brighten the sound, and also piped the recordings through the famous Capitol echo chamber, located underneath the parking lots outside the Capitol Tower.
Capitol also signed or became American distributors of albums by Badfinger, The Band, The Beach Boys, Grand Funk Railroad, If, Sandler and Young, Steve Miller Band, People, Pink Floyd, Linda Ronstadt, The Human Beinz, Peter Tosh, and various solo albums by members of the Beatles.
In 1969, Capitol decided to modernize its logo and supplanted its capitol dome logo with a "C" logo incorporating a 45 rpm record design. That logo lasted through 1978 when it was decided to return to the capitol dome design.
Between 1964 and 1970, Tower Records was a subsidiary label.
In 2006, the label signed a deal to distribute Fat Joe and his Terror Squad Entertainment. Around the same time, Capitol was able to sign New York phenom Mims. In this deal they also agreed to distribute his American King Music label. Around this time they were also able to add J. Holiday, the main artist for Music Line Group to the label as they have all become frequent collaborators. Now it seems that Capitol has gained ground on some of the more popular labels such as Def Jam, or Interscope Records with these signings. In 2007, they were able to strike up a distribution deal with The Game's The Black Wall Street Records and have signed former Bad Boy Records star Faith Evans. Jermaine Dupri and his So So Def Recordings label were briefly signed on to the label as a result of the Virgin Records merger. Dupri was the head of urban music for the label.
In February 2007, EMI announced a merger of Virgin Records and Capitol Records into the Capitol Music Group, as part of this restructuring, hundreds of staff from multiple divisions were laid off and many artists were cut from the roster. With the sale of the Capitol Tower, EMI is planning to close Capitol's operations in Los Angeles and concentrate its work force in New York City.
In 1957, Capitol Records issued the original cast album of The Music Man, starring Robert Preston, an album which became one of the biggest cast album sellers of all time, even after the highly successful film version of the show was released in 1962. Capitol was also responsible for the original cast and movie soundtrack albums of Cole Porter's Can-Can and the original cast album of Stephen Sondheim's A Funny Thing Happened on the Way to the Forum. In 1962, Capitol issued a studio cast recording of the songs from Lionel Bart's Oliver!, in anticipation of its U.S. tour prior to its opening on Broadway.
In 1966, Capitol released the soundtrack album of the documentary tribute, John F. Kennedy: Years of Lightning, Day of Drums, a film made by the United States Information Agency, and originally not intended for general viewing. However, the quality of the film was considered so high that the public was eventually allowed to see it. The film featured the voice of Gregory Peck as narrator, with narration written and music composed by Bruce Herschensohn. The album was virtually a condensed version of the film — it included the narration as well as the music.
One spoken word album which was immensely successful for Capitol was that of the soundtrack of Franco Zeffirelli's smash film version of Shakespeare's Romeo and Juliet, which became the highest grossing Shakespeare film for years. The album featured not only Nino Rota's score, but large chunks of Shakespeare's dialog. The success of this album in that pre-VHS era spurred Capitol to issue two other Romeo and Juliet albums — one a three-disk album containing the entire soundtrack of the film (dialog and music), and another album containing only Nino Rota's score.
However, as Capitol was to be later accused of doing with Beatles albums, there was some tampering with the Years of Lightning and Romeo and Juliet albums. Extra music was added to some scenes which, in the actual film, contained little or no music, such as the duel between Romeo and Tybalt. Presumably this was done to show off the score — and at the end of both the abridged and complete versions of the Romeo albums, the end credits music was omitted, especially unfortunate since virtually all of the film's credits were saved for the end of the picture.
Capitol tried to strike gold again with another spoken word album, one made from the 1970 film Cromwell, starring Richard Harris and Alec Guinness, but in this case, both film and album were not successful.
The influence of the Romeo and Juliet album spread to other record companies for a brief while. Columbia Records issued an album of dialog and music excerpts from the successful 1970 Dustin Hoffman film, Little Big Man, and 20th Century Fox Records included George C. Scott's opening and closing speeches, as well as Jerry Goldsmith's score, in their soundtrack album made from the film Patton.
This trend continued through the Beatles' American discography, until the albums had little relation to their original British counterparts. The Beatles' albums were finally released unmodified starting with Sgt. Pepper's Lonely Hearts Club Band. This was thanks to a renegotiation of the Beatles' complicated management and recording contracts. Tired of the way Capitol in the US and other companies around the world were issuing their work in almost unrecognizable pieces, beginning in 1967, they had full approval of all album titles and cover art, track listing and running order, worldwide. Their first order of business was to stop the issuing of 45 RPM singles featuring tracks taken from their albums. Instead they would issue non-album tracks as singles in between album releases. This policy changed in late 1969 when a severe cash crunch hit the Beatles company, Apple Corps., and the band was forced (at the urgent behest of new manager Allen B. Klein) to issue a single immediately in conjunction with the "Abbey Road" album (Something/Come Together) in order to pay bills. Four months later Apple allowed Capitol Records to issue the singles compilation "Hey Jude" (aka "The Beatles Again") to keep cash flowing to the company.
This continued with other bands:
The company has also had a history of making mistakes with album releases; the American release of Klaatu's debut album had several spelling errors on the track list, and later Capitol pressings of CD versions of Klaatu's albums suffered severe quality problems. The poor sound quality of Duran Duran's May 1982 release Rio (on Capitol subsidiary Harvest), contributed to the lag in initial sales, until a remixed version of the album was released in November.
The Capitol Records Tower is one of the most distinctive landmarks in Hollywood, California. The 13-story earthquake-resistant tower, designed by Welton Becket, was the world's first circular office building, and is home to several recording studios. Although not originally specifically designed as such, the wide curved awnings over windows on each story and the tall spike emerging from the top of the building combine to give it the appearance of a stack of vinyl 45s on a turntable.
The construction of the building was ordered by British company EMI soon after its 1955 acquisition of Capitol Records, and was completed in April 1956. The building is located just north of the intersection of Hollywood and Vine and is the center of the consolidated West Coast operations of Capitol Records -- and was nicknamed "The House That Nat Built" to recognize the enormous financial contributions of Capitol star Nat "King" Cole. The rectangular ground floor is a separate structure, joined to the tower after it was completed.
In mid-2008, a controversy erupted over a plan to build a condominium complex next door, igniting fears that the building's legendary acoustical properties (specifically its renowned underground echo chambers) would be compromised.
The blinking light atop the tower spells out the phrase "Hollywood" in Morse code, and has done so since the building's opening in 1956. This was an idea of Capitol's then president, Alan Livingston, who wanted to subtly advertise Capitol's status as the first record label with a base on the west coast. The switch activating the light was thrown by Lyla Morse, Samuel Morse's granddaughter. In 1992 it was changed to read "Capitol 50" in honor of the label's fiftieth anniversary. It has since returned to spelling "Hollywood".
In the 1974 disaster blockbuster film Earthquake, the tower was shown collapsing during a massive tremor. Thirty years later, in an homage to Earthquake, the tower was again depicted as being destroyed, this time by a massive tornado, in The Day After Tomorrow.
The studios feature 10-inch-thick concrete exterior walls, surrounding a one-inch air gap, surrounding an inner wall that floats on layers of rubber and cork — all in an effort to provide complete sound isolation.
The facility also features echo chambers: subterranean concrete bunkers allowing engineers to add real physical reverberation during the recording process. The eight chambers are located 30 feet underground, and are trapezoidal-shaped with 10-inch concrete walls and 12-inch thick concrete ceilings. The chambers feature speakers on one side and microphones on the other, permitting an echo effect lasting up to five seconds.
Studios A and B can be combined for the recording of orchestral music and symphonic movie soundtracks.
The first album recorded in the tower was Frank Sinatra Conducts Tone Poems of Color.
The current headquarters for EMI Music Canada, which operates the Capitol label, are located in Mississauga, Ontario.
The Canadian branch of Capitol won two Juno Awards in 1971, the leading music awards in that country. One Juno was for "Top Record Company" and the other was for "Top Promotional Company".