In October 1912 the Edison Diamond Disc Record was introduced. Edison Laboratories had been experimenting with disc records for some 3 years, as the general public seemed to prefer them to cylinders. The thick Edison Discs recorded the sound vertically in the groove rather than the typical laterally cut groove (the only other vertical cut records being the French Pathé's discs), and could only be played to their full advantage on Edison Diamond Disc Phonographs. This combination produced audio fidelity superior to any other home record playing system of the time. However, Edison Discs and phonographs were more expensive than the competitors. This together with the incompatibility of the Edison system with other discs and machines had an adverse effect on Edison's market share. Nonetheless, Edison Discs for a time became the third best selling brand in the United States, behind Victor and Columbia Records.

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With World War I various materials used in Edison Discs came in short supply, and many discs pressed during the war were made in part with such makeshift materials as could be acquired at the time. This resulted in problems with surface noise even on new records, and Edison's market share shrank. Prior to the war Edison Records started a marketing campaign, hiring prominent singers and vaudeville performers to perform alongside and alternating with Edison records of their performances played on top-of-the-line "Laboratory Model" Edison Diamond Disc Phonographs. At various stages during the performances, all lights in the theater would be darkened and the audience challenged to guess if what they were hearing was live or recorded; accounts often said that much of the audience was astonished when the lights went back up to reveal only the Edison Phonograph on stage. According to a book published by the Edison company titled Composers and Artists whose Art is Re-Created by Edison's New Art (ca. 1920), the first such comparison test or "tone test" as Edison copywriters referred to them, took place at Carnegie Hall on April 28, 1916 with Marie Rappold of the Metropolitan Opera providing the live vocal performance.

In 1928 the Edison company began plans for making "needle cut" records; by which they meant standard lateral cut discs like the "78s" marketed by almost every other company of the time. The Edison "Needle Cut" records debuted the following year. The audio fidelity was often comparable to the best of other record companies of the time, but they sold poorly as Edison's market share had declined to the point where it was no longer one of the leading companies and Edison had few distributors compared to leaders like Victor, Columbia, and Brunswick.

Edison Records closed down in 1929. The record plant and many of the employees were transferred to manufacturing radios. The masters for the Edison Records back catalogue were purchased by Henry Ford, and became part of the collection of the Henry Ford Museum. They were recently deaccessioned by the museum and sent to the Edison Historic Site (National Park Service) in New Jersey. Edison then died in 1931. Some of the Edison catalogue is in the public domain and available for download at the Library of Congress website.