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Say You Want a Revolution - Vinyl Gets Another Spin
Think vinyl in the digital age of music streaming and downloading and it’s easy to think snap, crackle pop and clutter.
But one of the most unusual phenomenon of the past few years has been the renaissance of vinyl records – an odd curio in an era of consumption over collection and where the convenience of ‘All you can eat’, access all areas subscription streaming services has been winning out. But nonetheless the vinyl revival is well underway, sales volumes are increasing for both discs and hardware. New vinyl disc sales have doubled in retail value between 2013 and 2015 with consumer spend to reach almost U$1 billion during 2016. Consequently pressure is building on the supply chain to meet demand.
But why midway through the second decade of the 21st century are we witnessing a revival in demand for a format that the mass market abandoned years ago as being too clunky to use in addition to being less sonically perfect than CDs?
It shouldn’t happen here but it is.
So what is driving the vinyl revival? It has been a niche format for the best part of two and a half decades with sales underpinned by the long term vinyl aficionados and the DJ community. More recently we have witnessed the emergence of the younger consumer (16 to 35 year olds) buying into the vinyl concept.
Futuresource Consulting’s Living with Digital consumer research survey from July 2016, indicates that 22% of 16 to 35 years olds have bought a new or second-hand vinyl record in the last 6 months across the USA, UK, Germany and France combined. 85% of these buyers are buying new vinyl.
For some this is a fashion trend, their friends are buying vinyl and may have purchased a budget price turntable, it is considered to be cool. So, they follow the crowd and consequently may be short term vinyl buyers with little long term longevity in the market.
For some in this age group it is the collection process, the attraction of amassing elaborate artwork or collecting different coloured discs, while maybe never playing the discs – using streaming or download services to meet their listening needs. Futuresource’s previous wave of research from December 2015 suggested that 17% of all vinyl buyers do not even own a turntable.
While others who maybe dissatisfied with the sound quality of digitally delivered music and even CD, the attraction is the warmer fuller sound of vinyl records in comparison to other media.
For many younger consumers the ritual of listening to vinyl records, the interaction with the sleeve, the sleeve notes and the process of placing the disc on a turntable is their first tactile interaction with music, something older music consumers had taken for granted but had been lost to the download/streaming generation.
Moving forward this latter group with their enthusiasm for the sound quality, the ritual of playing the disc and their appreciation of the vinyl record, the music and artwork combined, as a complete artistic package are key for the music companies. It is essential that the record labels cultivate the younger consumers of today as the vinyl aficionados of tomorrow.
However, it is also evident that streaming services and vinyl buying are more than happily co-existing; half of Spotify subscribers have bought a vinyl record in the last 6 months – 4 times more likely than the overall population.
The vinyl revival presents an opportunity for the major labels to repackage their catalogue one last time, with major reissue programs of classic artists such as David Bowie, Pink Floyd, The Beatles, The Rolling Stones and Led Zeppelin – the latter out of print on vinyl since the earlier 1990’s – all generating significant volumes, although not all major classic rock artists or catalogue reissues have generated huge sales levels. Nonetheless, sales have been so good that in the UK and Germany there has been the launch of the first dedicated vinyl charts. In addition, the success of catalogue sales on vinyl has not gone on unnoticed by current front line artists, some of which have insisted on a vinyl SKU for new releases, although it has to be said with mixed sales results e.g. Ed Sheeran has achieved high sales volumes on vinyl for his 2014 release X.
The vinyl market has long been dominated by online retailers such as Amazon and specialist online music retailers satisfying demand. However, the upswing in disc sales has awoken interest amongst brick and mortar retailers – in the UK major supermarkets Tesco and Sainsbury’s have begun to stock a limited selection of LP’s in addition to a range of budget turntables, Media Markt is thought to have taken the process of vinyl purchasing and range management back in-house. In the USA the vinyl revival has resulted in the emergence of the non-traditional retailers most notably with clothes and lifestyle retailer Urban Outfitters achieving a significant share of the market.
However, the surge in vinyl demand has placed pressure on the supply chain, with around forty plants active across the US and Europe collectively. Limitations on capacity and the ability to expand, in addition to a shortage of skilled manpower, combine to create capacity bottlenecks and lengthy turnaround times.
The challenge for the music industry is maintaining momentum in the vinyl segment by successfully mining their catalogues and attracting and retaining consumer interest, converting today’s recent vinyl adopters to be the mainstays of the market tomorrow while all the while maintaining retail support.
Here at Futuresource Consulting we deliver specialist research and consulting services, providing market forecasts and intelligence reports. Since the 1980s we have supported a range of industry sectors, which has grown to include: CE, Broadcast, Entertainment Content, EdTech and many more.