Enrico Caruso signed with Victor in 1904. Over 16 years he made over $5 million (see below *) from records sold.
His fees at that time were $4000 for each song recorded. Added to that was 40 cents royalties for each sold record (going rate for records at that time : $1 or $1.50.) This combined with growing overall sales, convinced more and more performers that records could be profitable. See (*) figures below to guess why.
All fun….(and some $$$$)
(*) If you want to compare the value of a $5,000,000.00 in 1903 in todays value there are three choices.
real price of that commodity is $139,000,000.00
labor value of that commodity is $598,000,000.00
income value of that commodity is $840,000,000.00