I imagine there was a bit of both, but overall how did musicians feel about recording? Were they afraid that demand for live music would fall away, or were they more excited about being able to immortalize and sell their art?
John Philip Sousa (1854-1932) was an American composer and conductor, who made his name with military marches (you probably know this march of his. Also, he invented the type of tuba frequently found in marching bands). In 1906, he published The Menace of Mechanical Music.
In this article, he presents his objections to recording technologies. He had concerns of different natures: philosophical (is the sound those machines produce really music, or is it more of an imitation of music?), economical (people will lose their jobs to the machines), legal (what about copyright?), and social (people will stop making music themselves, losing the benefits of that activity).