The earliest related reference I've found was in the January 1892 issue of the "Phonogram." Edison was working on a "telephonic phonograph." It however was more of an answering machine. But by 1904 the Cahill Telephonic Company was raising money in Baltimore to attempt a telephone-based music service in America. (The company founder Thaddeus Cahill previously invented an electric keyboard-like device he called a "Dynamaphone." It played over the phone of course.)
"It consists of a number of alternating current dynamos, all of different frequencies, producing tones of different pitch, and manipulation is by a keyboard resembling that of a piano or organ. The music Is distributed over telephone wires to any number of receivers and megaphones may be attached to the receivers."The Dynamaphone may or may not have and anything to do with the real launch of "Phonograph Selections by Telephone" But Cahill and his company did. You could call him the father of streaming audio. The way it worked was that a subscriber needed a "special receiver to which a phonograph horn is attached." This is not an amplifier. That was only invented a year prior by DeForest in 1909. The image above does show a wire leading to the special receiver, however there is almost no way that wire includes power. (In that era, a battery would have been much more common.) Electrical amplification then was so new, and so revolutionary, that the amplification here was almost certainly acoustic. The wire is merely a phone cord. The article goes on:
As you can see in the second picture (below) there are a number of desk model phonographs on a counter for the ladies. The image is too grainy to guess a model. To the left are two operators, and at least 4 phonographs running, though the picture was surely staged. They could have been cylinders or discs in 1910. I cant tell for sure. While the article calls them "records" both discs and cylinders were called records in that era. At that time an Edison or a Zonophone would have been most likely. What gets me about the image is that I don't see horns. What means they were using an electromagnetic pick up of some kind to make the electrical conversion directly at the phonograph."At the central telephone exchange is a music room, which contains a number of phonographs, and an operating board to which the wires of the music subscribers are attached. each subscriber to the music service is supplied with a special directory giving names and numbers of records. When music is desired, the subscriber calls the music department on the telephone, asks for a certain record, and screws the horn into position. The music operator plugs up a free phonograph to the line, slips on a record and starts the machine. At the conclusion of the piece the connection is pulled down, unless more records have been requested."
Pricing was per song at 3 cents per song and 7cents per operate with a minimum commitment of $18 per year. In modern dollars that works out to a total of $415.85, but that' because 3 cents in 1910 is almost $7 today. Today you can download an MP3 single for 99 cents. [Thank you inflation calculator.] So corrected for inflation, the cost of music has gone down in the last 100 years.