Degree in musicology, and a focus on 20th century music.

There are several related developments which caused this change in the recording industry. For one thing, artists began to gain a bit more control over the rights to the music they were recording. With the advent of rock and roll and modern folk, but going back several decades to the early blues movement, the “singer songwriter” personality was emerging as a marketable commodity. Prior to this, radio and music distribution were fragmentary enough that multiple artists could record the same songs for their respective audiences. Often they had deals with producers which allowed the songs to be recorded by other artists. Sometimes producers outright owned the rights to new songs, particularly if the producer had commissioned the songs themselves.

What started to change this was the advent of the 33lp (edited: not the 45) record, and thus the development of the so called “concept album.” Television allowed bands like the Beatles to gain international fame, and do headlining international tours, which necessitated that their music be exclusive to keep the focus on the band. Songs in the 1960s were increasingly released on 33 lp records, which allowed an artist to create a signature set of songs for their audience. The decline of the single record made the economics of re-recording the same songs for multiple artists less financially attractive.

That being said, the practice never really went away. However as producers have increasingly focused on at least giving consumers the impression that the musician is the author of the music, having multiple releases of the same songs in too short a period would undermine that image. In truth, many popular songs do have alternative recordings by other artists, however these are often not released, or released much later.

Still, it is important to keep in mind that the practice of multiple covers being released for the same songs survived long into the 60s. One need only look at Bob Dylan’s author credits on dozens of other artists albums of the period to realize that the practice was widespread.

A lightly edited version of my answer to a previous question:

In the recording industry in the 1950s (or 1920s, for that matter), pretty much every popular musician covered every vaguely appropriate popular song. The Rodgers and Hart tune 'My Funny Valentine', for example, was covered separately by both Chet Baker and Frank Sinatra in 1954, and separately by both Ella Fitzgerald and Miles Davis in 1956 (and those artists are not out of the norm). And 'My Funny Valentine' is probably one amongst a dozen songs that each of these four artists each covered in this time period.

In fact, I have a book of Australian charts from the 1940s to the 2000s, and before the late 1950s, the charts in that book were focused on the song, rather than the performance - all of the different acts that were getting airplay/sales were listed after the name of the song, rather than each performance of the song being listed separately. And so one thing to remember is that the music industry existed before the recording industry; the primary way in which Tin Pan Alley songwriters made money is by selling sheet music, by getting people to play the songs in their own homes. In this time, there was a job called 'song plugger' which was basically the job of convinced live performers to introduce new songs into their repertoires so the song would become better known and thus sell more sheet music. So what changed between the old era of song pluggers and every artist covering every song and the current era of Taylor Swift's singles all being new songs?

One obvious change is that, by the mid-sixties, the way that people thought about records had fundamentally altered. In 1956, the record was, literally, a record of a performance - Frank Sinatra's version of 'My Funny Valentine' was likely recorded in one take on a stereo microphone setup, with Sinatra, in order to be louder, simply standing closer to the microphones than the orchestra.

But by 1967, you have something like the Beatles album Sergeant Peppers Lonely Hearts Club Band, assembled by overdubbing new performances on top of old, full of electronic effects and manipulation of tape recordings; it's a record that could not have been performed live at that time. By Sgt Peppers, it was clear that the record was no longer a record but an object of art in of its self. And if the record itself, rather than the song, is the object of desire, then a cover of a familiar song is no longer quite as much of a crowd-puller as it had been.

Going along with this change is that the ethos of jazz and Popular Music (in capitals) was replaced in the 1960s with the ethos of rock music and pop. In jazz (and/or the adult pre-rock Popular Music epitomised by Sinatra), individuality was demonstrated not in the choice of song, per se, but how that song was used as a canvas for virtuoso self-expression - in how Miles Davis soloed over the chords of the song, or how Sinatra chose to phrase the melody. In contrast, in rock, individuality is most strongly demonstrated through having a new song and sound of your own, preferably that you wrote yourself.

So these days, when someone does a cover, they are specifically covering a particular version - he is recording the covers in the knowledge that his is a secondary work, that people will be comparing his work to a more definitive work. In contrast, all of those versions of 'My Funny Valentine' in the 1950s were attempts at reaching the unreachable Platonic form of 'My Funny Valentine' epitomised by the sheet music, with none of the performances truly being definitive. 'Me!' belongs to Taylor Swift in a way that 'My Funny Valentine' can never belong to Chet Baker.

Many of the artists from the late 1960s who were still regularly doing covers make styles of music which were in some ways more influenced by the ethos of jazz than the ethos of rock. Herb Alpert and Dusty Springfield, for example, both come from a sort of easy-listening, light-entertainment background which had the values of Popular Music rather than pop, because their music was often aimed at older audiences who had grown up with the older values of Popular Music.

Similarly, there was a multitude of covers by soul artists in the 1960s - for example, Sam Cooke's 'A Change Is Gonna Come' was covered by Solomon Burke, Otis Redding and Aretha Franklin, amongst others. This comes from a style of music with big influences from jazz; most of the Funk Brothers who were the band on Motown records, for example, were jazz musicians 'slumming it'. It wasn't until the turn of the seventies that you get soul/funk records like Marvin Gaye's What's Going On or Curtis Mayfield's soundtrack to Superfly where the ethos of rock, with its focus on the sound of records and on the statements being made in the music, becomes a more dominant flavour of black American music. It's not coincidentally around this time that the great tradition of the soul cover of the recent song begins to dry up.

However, I should point out that most hit songs today are released by multiple artists - albeit not on major labels but on YouTube, through the ecosystem of YouTube stars who generally make their name with covers - everyone from Walk Off The Earth to Pomplamoose to Scott Bradlee's Postmodern Jukebox. And you still get songs like Leonard Cohen's 'Hallelujah' that are covered so often (whether on record or on TV talent show contests or on YouTube) that they elicit groans; these are of course much more common amongst that group of people who aim to demonstrate their virtuoso self-expression.

Around 1970, the industry started to move away from having session players play on everything. The role of the A&R man changed from providing artists with material to trying to use the illusion that the artist wrote most of their own material. This represents an economic change from studio time being the most scarce resource to something akin to image taking over.

For reference materials, I'd suggest three films: "Standing in the Shadows of Motown", "The Wrecking Crew" and "Muscle Shoals". Each shows a dominant force in different bands of time.

Obviously, Dylan and the Beatles predated this but it didn't really take root until around 1970. Even them I have multiple compilations on CD of works done in the traditional manner dating from the entire range of the 1970s.