A study of the music trade magazines of the late 1920s shows that
the foremost reason for the demise of the player piano was the
increased popularity of the amplified radio, starting around 1926.
Crystal radios had been around for years, but there wasn't much in
the way of programming.

When the radio got its new electronically-amplified voice, radio
stations began broadcasting more interesting programs, attracting
a much wider audience.  Thanks to the popularity of radios with
loudspeakers and interesting programming, piano and player piano sales
fell off dramatically in 1927 and 1928, before the great depression
began.

Art Reblitz
http://www.reblitzrestorations.com/