Here's an excerpt from an online article about Paul Whiteman:

On October 23, 1928, a deal was made with Carl Laemmle and Nat Goldstone of Universal Studios for Paul Whiteman to appear with his band in an upcoming motion picture. Universal assigned Paul Schofield as a writer for the movie. During the month of November jn 1928, Schofield had traveled on the road with the Whiteman Orchestra, meeting with Whiteman to discuss the story on the train between stops. On December 23, 1928, Paul Whiteman gave a concert at Carnegie Hall, with Bee Palmer as an added attraction... Universal Pictures filmed the concert for possible use in the motion picture planned with Whiteman in the following year. The film, "King of Jazz", was finally completed in 1930, but did not include any of the footage from the Carnegie Hall concert...

"King of Jazz" was the first motion picture to use a pre-recorded soundtrack made independently of the actual filming. Whiteman insisted that the entire soundtrack should be pre-recorded in order to obtain the best sound, and avoiding the poor recording conditions and extraneous noises found in a movie studio. Universal opposed the idea, but Whiteman insisted and prevailed over the reluctant studio executives. After the sound was recorded, the scene was filmed. Later, the film was synchronized to the soundtrack. Also, this allowed the movie to be directed in the same manner as a silent film, with resulting sounds not affecting the completed film. ..

The movie won an Oscar for Herman Rosse in the category of Best Art Decoration/Set Decoration in 1930 (the only category for which the film was nominated). The Oscar was presented at the Academy Awards ceremony held on November 5, 1930 at 8:00 PM in the Fiesta Room of the Ambassador Hotel in Los Angeles, California. This ceremony was broadcast on the radio.

During its national release, "King of Jazz" cleared less than $900,000. Around Hollywood, the movie came to be called "Universal's Rhapsody in the Red". Overseas, it fared better and eventually made a profit. During the 1930s, the film found its best audience in Cape Town, South Africa, where it played seventeen return engagements. Unfortunately, the delays in obtaining a script resulted in two factors that affected the profitability of the film. First, the public was tiring of the plethora of movie musicals that started with the film "Broadway Melody" in 1929. Also, the Depression resulted in an economic downturn that caused people to focus more on essentials, thereby preventing a more successful run of the movie. In fact, because of poor box office receipts and the Old Gold radio program not being renewed in April 1930, Whiteman had to let 10 bandmembers go and cut salaries by 15% on the remaining bandmembers.

http://www.redhotjazz.com/kingofjazz.html