I was doing a little research last night, reading through the six volumes of DAW books' Years Best Fantasy series that writer/editor Lin Carter had edited back in the 1970s. In the introduction to each book, Carter gave a report on the state of fantasy fiction as it stood. It forms a strange time capsule. In volume one, which came out in 1974, Carter mentions that J.R.R. Tolkien died the previous year without finishing The Silmarillion, and that Lancer books had gone bankrupt, leaving the fate of the Conan paperback series in doubt.
In the next few volumes Carter will mention the publications of Watership Down, The Book of Merlin, and the Sword of Shannara. (Carter hated the Sword of Shannara, by the way. He thought it too derivative. You'd need to be familiar with Carter's own writing to realize how funny this is.) It will take three more years for the Lancer problem to be cleared up and for ACE books to take over the publication of the Conan series. Carter will eventually report that J.R.R. Tolkien's son Christopher has resigned his position as a professor and taken his family to France so he can complete the editing of the Silmarillion.
The amazing thing is, at this point in time, the future of fantasy as a viable genre was still in doubt. It's hard to believe these days, when the fantasy/SF section at Barnes & Noble takes up more floor space than any genre besides Romance, that once upon a time there simply wasn't that much fantasy out there. I remember that when I first started reading fantasy, coincidentally in about 1974, that the SF section at Waldenbooks was a single six foot tall shelf unit, and the majority of books there were science fiction. I woud dig through the books, looking for anything with swords on the cover instead of spacecraft.
With Conan out of print, the sword & sorcery pickings were slim and comprised mostly of Conan knock-offs like Brak and Thongor, though thankfully Fritz Leiber's Fafhrd and Gray Mouser stories were available. One nice thing was that almost all of Edgar Rice Burroughs books were in print and I bought shiny new copies of the Mars, Venus, and Pellucidar books. By the time I abandoned the genre about 1980, the size of the fantasy section had increased to four or five shelves. When I returned about two decades later, the fantasy genre had grown by leaps and bounds and the shelves were full of authors I'd never heard of.
The other strange thing, which I've just thought of as I write this, was how loosely defined fantasy/SF was. Waldenbooks and B.Dalton often shelved such diverse writers and books as Ray Bradbury, H.P. Lovecraft, Doc Savage, Tolkien, and even early Stephen King in the same area. I think King's eventual success caused the creation of a 'horror' section in the chain stores.
But yeah, it's strange to look back at the state of fantasy circa 1974. The Tolkien clones hadn't really ramped up yet. Authors like George R.R. Martin, C.J. Cherryh and Tanith Lee were just beginning their careers, and the old timers were folks like Poul Anderson and Andre Norton. Seeing Watership Down and the Silmarillion on the New York Times bestseller list was a big big deal. How times have changed.