In 1944, with the war drawing to a close, Metro-Goldwyn-Mayer, Twentieth Century-Fox, and Warner Brothers agreed to hire fifty musicians for each of their orchestras; Paramount contracted forty-five, and Columbia, RKO Radio Pictures, Republic Productions, and Universal agreed to employ thirty-six musicians each, on a guaranteed annual salary.⁴² Regarding the number of full-time hornists working in the late 1940s, Gale Robinson recalls:

We figured at one time that there were thirty horn players that were making a living around town. That would include the Philharmonic, maybe five down there, then Fox, Warner Brothers and MGM, and here and there, plus the light opera shows, plus the ones that were free lancing in radio. That was before TV started. But there was a huge number of guys who were making a good living playing horn out here. That was the peak, and it has never been the same since.

While the studio contract orchestra system would last until 1958, the seeds of its demise would be planted in 1948, with a landmark legal decision in which Paramount Studios was forced to divest itself of its movie theaters.⁴³ The Supreme Court ruled the studio's control of both production and distribution monopolistic. The other major studios were required to follow suit and divest themselves of their theater holdings. The end of this vertical monopoly eventually eroded the studios' financial stability, the full effects of which would only be felt a decade later. Although the number of musicians on contract may seem small when compared to a modern symphony orchestra roster, it was not unusual for a studio to borrow players from other studios for large pictures. Studio hornist and composer George Hyde recalls:

Because of the union quota laws, employment for musicians was normally limited to a single studio. James Decker explains how the quota laws worked:

Jack Cave refers to Fred Fox⁴⁶ as he explains that the quotas also extended to radio:

The studios had locked themselves into a system of employing a minimum number of musicians on salaried contract. From 1954 to 1956 there was a precipitous drop in the number of hours of recording, while compensation remained the same.⁴⁷ This system of employment would prove economically unsustainable for the studios, as fewer and fewer pictures were being produced, along with the accompanying revenue loss. Eventually, this led the studios to refuse to renew the contracts for all the orchestras in 1958.

Between 1944 and 1958 most of the horn players in the recording industry had contracts with the major studios, but that was not the case for everyone. It was not necessary to have a contract to do well during the period of the contract orchestras according to de Rosa:

With falling production and declining receipts, the days of the studio contract orchestras were numbered. It was also during this time that television scoring began to create a substantial amount of work. Unfortunately for the Los Angeles recording musicians, four-fifths of all television music in 1955 was recorded elsewhere, much of it in Europe.⁴⁸ Recording wage scale was undoubtedly high but the money that went directly to the musicians was only a part of the cost to hire them.⁴⁹ Television residuals that had been earmarked for the musicians were diverted to the trust fund in 1955. A flat fee of $2,500, which went into the trust fund, was levied on every half-hour television show and added to the production costs even before a single musician was hired. The notion that recorded music put live musicians out of jobs led to the creation of the Music Performance Trust Fund in its final 1947 form. The levy collected on recorded music was to be transferred to live performances through the fund. Most of the country's union musicians worked part-time and did not record, but their votes overwhelmed the small number of studio musicians.

James Petrillo, President of the American Federation of Musicians (AFM) from 1940 to 1958, was essentially hostile to the "elite" recording musicians. He longed for the days of live music, even after the failed attempt from 1942 to 1944 to ban recorded music permanently. Though there was a ten-percent contract raise in 1954 for recording musicians, the increase was siphoned off to the union trust fund.

These additional costs forced recording work out of the country as well. Opposition to Petrillo led to the formation of The Musicians Guild of America, which won the right to represent the recording musicians in Los Angeles in July of 1958.⁵⁰ This was during the same year in which the major studios refused to renegotiate new contracts with the AFM, leading to an AFM strike. The Guild eventually settled the strike and brought an end to the studio system in 1959. It was at this time that the quota laws were also effectively abolished. In order to retaliate, the AFM banned those who had left the union (to join the Guild) from performing live music, since the AFM controlled all live-music contracts.

Most of the top recording musicians joined the Guild, but not all. This caused many bitter feelings between the two groups. Friends of thirty years would not speak to each other. There were those who thought the studio contract system could be saved. At stake were the jobs of hundreds of musicians, who would not be able to compete for work in the new freelance environment. On the other hand, the leading players would be free to take as many jobs as possible. Common refrains among Los Angeles studio musicians interviewed by Faulkner in 1968, ten years after the demise of the contract orchestras, were: "About 100 players do the majority of work in film and recordings. One hundred players do about 90 per cent of the work, the best work," and "the union struggle in the late fifties was an attempt by the cream of the crop to control all the work in town."⁵¹ For the most sought after musicians, it would mean being able to work virtually non-stop,⁵² while the majority of others, who had not kept up their skills or were marginal musicians, would be forced to leave the business. There was an additional factor that would effect the employment of many musicians: the vagaries of freelance hiring politics.

The switch to a freelance system was both inevitable and traumatic, although at the time the immediate outcome was far from certain. De Rosa recalls how he had made plans to leave the country:

I was one of the very first to be expelled from the union by the American Federation of Musicians (by Petrillo) because I was on the Board of Directors of the Local 47 at the time. The president of Local 47 at the time was a man named John TeGroen. He said, "I have a telegram from J. C. Petrillo and I'll read it to you," and he said, "Poll your board and anyone who votes to uphold the meeting of recording musicians at the [Hollywood] Palladium on Monday shall be expelled." So I went home and talked to my wife and I said, "We'll just have to do what Mr. Brain said. We can go to England and work there if I can't be a member of the AF of M. If I can't be in the union, I can't work in the music business." I went down and polled my vote, voting for upholding the meeting, and when I got home at 11 o'clock, there was a telegram expelling me from the AF of M. Of course at that time I was under contract with Alfred Newman and he had a lot of pressure from the union to not have us on the recording stage. After the second call, he called me in with two other men and we thanked him for being so nice to us - keeping us on as long as possible. But then he read this telegram from the head lawyer of the Twentieth Century-Fox Corporation, saying that because of the Taft Hartly law, no matter what union pressure you get, do not dismiss Mr. de Rosa, Clyman and Atkinson, because we fear that they could win a multimillion dollar suit against the corporation. At that time we were able to do anything that went across [state] lines. Any recordings were fine but our live music performances were shut down. We couldn't do anything live for at least a couple of years.

James Decker made plans to leave the business altogether: "We had a nine-month strike. In fact, that started me going into another business. I was going to be a technical writer for a manufacturer, telling customers how to operate their products." Even for many of those whose careers survived, the turmoil of the Guild years was an open wound that did not heal.

In 1960 there was another National Labor Relations Board sanctioned vote for certification. By a narrow margin, this time the American Federation of Musicians regained bargaining control for the Los Angeles recording musicians. This was in no small part due to the adoption of many of the Guild's ideas. Nevertheless, the AFM could not turn back the clock on the new freelance system. In 1961, a rapprochement between the AFM and the Guild led to the reinstatement of all Guild members in addition to special representation in the AFM for the recording musicians. This representation became the Recording Musicians Association (RMA) that is part of the AFM. Other major recording cities started their own RMAs and in 1983 an international RMA, uniting the local organizations, was forged.