Retail
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Record Store Day already has a magnificent track record of bringing music fans out to stores, but this year, the event received an added boost from Taylor Swift’s folklore, the long pond studio sessions — a double LP that resulted in longer-than-usual lines at retailers.
While the spread of Record Store Day (RSD) releases is now a major draw unto itself, the Swift release, which enjoyed a 75,000-unit distribution to stores across the U.S., was the best-selling title by far. Or as Stu Goldberg, owner of Mr. Cheapo CD & Record Exchange on Long Island, N.Y., put it: “Today, it was all about Taylor Swift.”
An assessment of Record Store Day wouldn’t be complete without a call to its administrator and co-founder, Michael Kurtz, who noted that RSD is on course to break the sales record for the most vinyl sold in a single day. When RSD “began 16 years ago, we had 30 releases that sold about 80,000 copies,” Kurtz says. “On Saturday, we had one record, Taylor Swift, selling 75,000 or almost that amount, and plenty of sales from other releases.” It’s likely that her release could be a Top 5 record on next next week’s Billboard 200.
Likewise, Rough Trade store manager George Flanagan said the store’s line was “informed by Taylor Swift fans,” while Newbury Comics store manager Therrien Dolby says the Swift release was the “big draw.” And In Patchogue, NY, Jeff Berg, the owner of Record Stop, says there were so many Swift fans, the store had to create two lines: one for fans seeking her release and one for everybody else. The Swift line had its own dedicated cash register too.
In acknowledgement of the day’s impact, Alliance Entertainment, the largest music wholesaler, says that more than 800,000 units of vinyl were created and shipped for RSD, with retail sales expected to surpass $32 million. “Record Store Day has been a long-time partner to Alliance Entertainment, always collaborating to benefit the independent record store community,” Alliance senior vp of sales Ken Glaser said in a statement.
RSD In NYC
Billboard began its New York City-area Record Store Day trek by driving out to Newbury Comics at Roosevelt Field Mall on Long Island. Upon arrival at 9 a.m., about 40 people were lined up outside. Like other stores later in the day, store manager Dolby positioned himself at the front door, regulating entry to make sure the store didn’t get too crowded and overwhelm the staff. At the 8 a.m. opening time, about 150 people were waiting, Dolby reported, including one customer who arrived at 1 a.m. (Dolby added that mall management, the Simon Property Group, was very helpful and accommodating to the store for the event.)
A common sight on RSD.
Ed Christman
Inside the store, a quick scan revealed that roughly 25% of its bin floor space is devoted to music, with 17 bins dedicated to vinyl and two dedicated to CDs. The store also carries a healthy stock of music merch, mainly artists-t-shirts, and music titles also enjoy a prominent position in front-of-the-store end caps.
Upon leaving Newbury Comics, Billboard headed to Mr. Cheapo CD & Record Exchange in Mineola (the store has a second location in Commack, Long Island). When co-owner Goldberg arrived at the store on Saturday morning, he found a line around the block due in large part to the Swift record, though he admitted that the store underbought the title and quickly ran out of it as a result. That was the store’s number one title for the day, he says, and “if we had more, it would have been the biggest by a mile.”
Fortunately for Goldberg, most people stayed in line after learning the Swift release had sold out. The other big sellers on Saturday were Billy Joel‘s Live at the Great American Music Hall, 1975 and Eric Carr’s Rockology, because “Kiss is always a great seller here,” he adds. Behind the counter, store staffer Jessica commanded the cash register and bagged purchases while touting her band T.O.Y.S.’ next gig with a bag-stuffer flyer for their set supporting hardcore punk band Urban Waste at the Amityville Music Hall on May 5.
Beyond the vinyl explosion, Goldberg noted that CDs are again becoming a big deal because young fans “want something tangible” from their favorite artists.
While at Mr. Cheapo, Billboard ran into respected sales/commerce executive Ken Gullic, who was doing his best to support RSD by picking up Soul Asylum‘s MTV Unplugged 1993 and Tori Amos‘ Little Earthquakes – The B-Sides. Most recently with MNRK, Gullic is entertaining freelance options; entertainment suppliers can reach him at kengullic@gmail.com.
After Long Island, Billboard decided to hit record stores in Ridgewood, Queens and then Bushwick, Brooklyn, on the way to Rough Trade Records on Sixth Avenue near 49th Street in Manhattan. Trying Google for Ridgewood, Billboard hit Scorpio Records and then Deep Cut Records, but things didn’t work out so well. At 11:30 a.m., Scorpio Records was closed and, as it turns out, generally doesn’t open until 2 p.m.
While Deep Cut Records was open and had about 20 people in line, the owner effectively told Billboard to get lost by slamming the door after being asked what his best-selling title was.
Onward Octopus Records in Bushwick. While Octopus didn’t stock any RSD titles, Nigel, who identified himself as the store owner, says it wasn’t for a lack of trying. He explained that his store is relatively new, having opened last summer and that an e-mail to the Record Store Day website was never returned. Nevertheless, the store advertised a 10%-off sale for RSD on a sign placed outside to celebrate the event. Nigel says Octopus Records has a deep selection of electronica music and is now building out other genres.
Down the block from Octopus, Brooklyn Vintage, a clothing store that also sells other merchandise, including records, was getting some Record Store Day action too, with crates of vinyl set outside the door (where a DJ was spinning tunes) and a bin of vinyl inside.
Finally, Billboard headed to Rough Trade in Manhattan, where things were still swinging at 2 p.m. Upon arrival, at least 150 people were still in line, which ran to the corner of 6th Avenue and then a third of the way down 49th Street. The size of the line held steady throughout most of the day, as security never let more than eight or so customers in the store at one time to allow staff to handle sales in an orderly manner.
Store manager Flanagan reports that the first customer lined up sometime before 8 p.m. on Friday night and that the same customer has been the first person in line for at Rough Trade on RSD for at least five years. Meanwhile, beyond the hundreds of copies of the Swift record sold by the store, The 1975’s Dirty Hit release, Live With The BBC Philharmonic Orchestra, was its second most popular, having sold out by 3 p.m.
After Rough Trade, Billboard called it a day but is sorry to have bypassed Record Stop in Patchogue on Long Island, as that store put on an old-school Record Store Day bash reminiscent of the early days when stores threw parties for the annual event. “The town of Patchogue is very pro-business, so we did a block party, getting permits and had the street closed off from cars,” Record Stop owner Berg reports. “We had a food truck and the nearby Burgerology restaurant was hawking Blue Point beer, while we had five bands and a DJ.” According to a Record Stop flyer, the bands were Thee Unsung, the Detonators, Bang For Your Buc and War Pigs, while the DJ set was supplied by Vinyl Guy Tom.
Berg says he decided to make this year special because he wanted to thank his customers as well as his staff. “Record Store Day is about a celebration of what we do,” he says.
Tomorrow comes the most wonderful time of the year: Record Store Day. As fun as some fans find it – and I joke that it’s my favorite holiday – it’s hard to remember how odd an idea it seemed when it started, in 2007. Back then, CD sales were sliding fast, download sales were growing a lot slower, and mass-market streaming was still taking shape. The idea of a day devoted to buying vinyl, much less in physical stores, was anything but obvious.
Now look. Vinyl generated more revenue in the U.S. than CDs by 2019, and more unit sales by 2022, according to the RIAA. Last year, vinyl generated $1.2 billion in the U.S. — more than Latin music, which brought in $1.1 billion, although Latin music brings in far more worldwide. And much of this growth came at a time of serious challenges, from insufficient manufacturing capacity to supply chain problems.
Now what? The future of vinyl was one subject that came up at a Nov. 3 panel that I moderated at RIAA headquarters in Washington, D.C. With me were Vinyl Me Please CEO Cameron Schaefer, Byrdland Records co-owner Alisha Edmonson, Thirty Tigers director of physical sales Mike Couse and consultant Simone Piece.
Among the topics that came up:
How vinyl fulfills a need for “better connection with music”
How the pandemic supercharged growth
Whether recent new buyers will stick around for the future
The most important question, of course, is what this means for artists. It was disheartening to hear that delivering vinyl to stores even close to an album’s release date requires up to ten months of advance planning. Even so, many independent acts make more money on vinyl than they do from streaming.
Another highlight? A performance from Lola Kirke:
No one knows what the future holds for vinyl. Judging by the format’s fast growth, however, it will remain an important part of the recording industry’s revenue mix for at least the next few years, and perhaps long after that.
Watch the entire panel here:
Metallica has always had a strong independent streak for a band that spent its formative years on a major label. Now, a decade after getting the rights back to their biggest albums, the band is buying Furnace Record Pressing, a plant in Alexandria, Va., to serve its vinyl business, which has grown by keeping catalog albums in print and releasing ambitious box sets aimed at its legions of hardcore fans.
For a decade, Furnace has pressed records for the band, which has a reputation for releasing high-quality vinyl. At a time of supply-chain issues and manufacturing delays, the plant helped the group keep most of its albums available, plus a growing number of ambitious box sets. (Its most recent “black album” box set includes a double LP of the album, three live LPs, 14 CDs and 6 DVDs.) Last year, the group pressed more than 902,500 pieces of vinyl for more than 620,000 packages, according to management, not all of which are made at Furnace. The band sells roughly half of these in the U.S.
“We couldn’t be more happy to take our partnership with Furnace,” and its founders “to the next level,” said Metallica drummer Lars Ulrich in a statement. James Hetfield, the singer-guitarist who co-founded the band with Ulrich, said that the plant had been “great to Metallica and more importantly to our fans,” and that the purchase would ensure that potential vinyl buyers “will have continued access to high quality records in the future.”
Those fans are already buying a good deal of vinyl. In 2022 and 2021, Metallica rated among the best-selling acts on vinyl in the U.S., according to Luminate – No. 6 in 2022, with 387,000 albums sold and No. 7 in 2021 with 337,000 sold. That’s especially remarkable for a brand that hasn’t released a new album since 2016. (In 2022, the group’s most popular release was Master of Puppets, which sold 91,000, followed by “the black album” and Ride the Lightning.) In most years, the U.S. accounts for roughly half of the group’s vinyl sales worldwide.
“Metallica over-indexes dramatically with physical product,” says Marc Reiter, who helps run Blackened Recordings, the band’s label. “The fans enjoy owning the physical product.”
Although the band hasn’t released a new album since 2016 – the new album, 72 Seasons, comes out April 14 – there’s plenty of product out there. The band regularly releases box sets devoted to their albums, most recently Bob Rock-produced “black album,” and does a good job keeping in print its older releases.
Its relationship with Furnace, which goes back almost a decade, has been part of that. “The catalog is always being pressed,” says Brant Weil, head of marketing at Q Prime, the band’s management company. A couple of years after the band got back the rights to its older albums, its management team realized that it needed a steady supply of vinyl that could live up to the bandmembers’ high standards.
Furnace, which then also brokered vinyl pressing capacity at other plants, arranged a deal with Pallas, a German pressing plant with a reputation for high-quality work, and Q Prime was able to arrange to essentially lease its own presses there. “We never want to be out of stock on Metallica vinyl,” Weil says. “I didn’t want our release plans to be dictated by manufacturing timelines.”
At that point, “any vinyl shortages ceased to be,” Reiter says. Eventually, as Furnace started pressing more records itself, they started pressing more for Metallica as well.
Gradually, the two companies grew close. “We looked at them as more of a partner than a client,” says Furnace found CEO Eric Astor. (As it happens, the first record Furnace worked on was the 2008 re-release of “the black album” as an audiophile edition.) Furnace, like Pallas, has a reputation for doing quality work at a time when some pressing plants have sacrificed quality for output. “We’d rather throw out some bad records than make as many as we can,” says Furnace COO Ali Miller. (Discarding some vinyl is a factor in quality control.) Furnace has been pressing copies of the band’s forthcoming album, 72 Seasons, since January.
Furnace will not change much, Astor says, and plans call for the plant to keep working on other projects, as well as ones for Metallica. “They want to keep the quality and service the whole industry,” Astor says. “It will give us the opportunity to invest more.”
The hope is that Furnace can grow – as both a partner to the band, as well as an investment the group and its team have come to understand well. “They have the same indie spirit we have,” Reiter says, “and they like doing things the right way, which is also the Metallica way.”
In the Napster era, paid downloads were a music industry savior, generating $1.3 billion at their peak in 2012, according to Luminate. But the format seems like it’s headed toward extinction. Digital track sales have plummeted over the past decade, from 1.3 billion in 2012 to 152 million last year, a decrease of 88.6% — in 2022 alone, they dropped 25.1% from the previous year.
The declining importance of the format is evident in the desktop version of Apple’s once mighty iTunes Store, which now buries such purchases halfway down its Apple Music homepage. At Amazon, searching for MP3s diverts consumers to the Amazon Music streaming platform, where options include streaming as well purchasing digital music, vinyl or CDs.
“It’s a business that has been in steady decline for years,” says a source at a major label, adding that the company doesn’t receive complaints from consumers about the lack of prominently displayed downloads on retail sites. “We’re in a streaming economy now.”
That said, the sale of 152 million tracks translates to revenue exceeding $152 million, and many artists and labels say the format remains both useful and lucrative. If an artist racks up a significant number of digital sales — like Bonnie Raitt, who sold 9,000 downloads of “Just Like That” in the week following her February Grammy award win for song of the year — it can boost chart performance and validate career relevance. (A download sale is weighted more heavily in determining Billboard chart metrics than a single stream.)
And download sales can be valuable in other ways. In January 2021, two years after Avery Anna became TikTok famous as a high school student for singing country songs in a bathtub while self-isolating during the pandemic, her track “Just Cause I Love You” shot up the iTunes chart. “When we see something pop up on that chart, that certainly makes us pay attention,” says Warner Nashville senior vp of commercial partnerships Tim Foisset. Downloads are “an early indicator that there is something there — a certain fan base is going to engage with a certain artist.” Five months later, Warner Nashville announced it had signed the Flagstaff, Ariz., singer-songwriter.
“It’s part of the list of tools we employ to move on the chart,” Foisset adds. “While it isn’t crucial to our day-to-day decision-making or overall revenue, this is something that still can be important when we’re building a story for a song or a developing artist.”
Downloads generally appeal to an older crowd that prefers ownership to the song-renting nature of YouTube or Spotify. But younger K-pop and Taylor Swift fans respond to exclusive deals, like Swift’s 12-hour January sale of limited-edition digital copies of Midnights with exclusive cover art. Christine Barnum, chief revenue officer of distributor CD Baby, calls the format a piece of virtual merchandise that is “a much more approachable version” of a non-fungible token.
So far, though, that hasn’t connected with listeners the way that physical formats have of late. According to the RIAA, cassette sales jumped 28.3% from 2021 to 2022, from 343,000 to 440,000. Vinyl’s growth has been well documented, rising 847% from 2012 to 2022. Year-over-year growth decelerated in 2022 to a modest 4.3%, rising from 41.7 million in 2021 to 43.5 million.
Overall sales of physical product are dwarfed by streaming, which accounted for 84% of the industry’s total 2021 revenue of $12.4 billion. But revenue for physical sales reversed a decline during the pandemic, rising in 2020 for the first time in 16 years from $1.1 billion in 2019 to $1.2 billion in 2020, then continuing to grow to $1.7 billion in 2021.
Fans can’t hang downloads on their walls, though, and the format continues to slide. “Not very important,” says Ben Swanson, COO of top independent Secretly Group. “We still track it and sell it, but we don’t use that data meaningfully in budget discussions or anything like that.”
While Miley Cyrus’ “Flowers” has topped Billboard’s Digital Song Sales chart for the past five weeks, Jonathan Daniel, manager at Crush Music, says the revenue is not very significant for a pop star on her level. The download success, though, is useful to show that an older audience has come around to the former teen star’s work. “It’s a relative gauge of a slightly older listener — more of a [adult top 40] or adult contemporary format than, say, a pop or alternative-format listener,” says Daniel, who also represents Sia, Green Day, Lorde and Fall Out Boy.
Amazon and Apple representatives didn’t respond to requests for comment. Several online retailers, however, still emphasize downloads. Beatport’s customer base relies on them for its DJ sets — its download sales have increased by 5% to 10% every year since 2017, according to CEO Robb McDaniels. “We’re probably one of the only places in the world where download sales are increasing,” he says. “I think the labels are happy to see that.”
Barnum adds that downloads remain crucially important for indie artists who make far less than Cyrus’ level of revenue. “It’s a great tool — ‘I bought your download’ as opposed to ‘I played something on Spotify,’ ” she says. “Point zero-zerozero-something cents versus a dollar.”
There are twin $10 billion milestones served up in the RIAA’s 2022 year-end report on U.S. recorded music revenues: paid subscription streaming revenue reached $10.2 billion over the course of the year; and industry revenues at wholesale reached $10.3 billion, the first time either of those markers have been crossed, the trade body reports.
Those are two headline numbers of the annual report, wherein U.S. recorded music revenues grew 6.1% at retail, from $15.0 billion in 2021 to $15.9 billion in 2022. That marks the seventh straight year of growth for the business, though the percentage of that bump is the lowest since 2015 (+0.9%), the first year that retail revenues began to rise from the industry’s 2014 nadir. (The growth that year was so small, around $65 million, that it was essentially flat for all intents and purposes.) In fact, 2022 is the only year during that time period when growth has not exceeded double digits other than 2020, when a first COVID-impacted year of uncertainty still saw a 9.2% rise in revenue.
Streaming, unsurprisingly, made up the bulk of the industry’s revenues — 84%, up a tick from 83% in 2021, adding up to $13.3 billion in 2022, up 7% from $12.4 billion the year before. Within that, the aforementioned paid streaming chunk was the largest, accounting for 77% of that total for 8% year-over-year growth, and in and of itself making up just shy of 2/3s of the industry’s overall revenues; of the overall paid streaming number, so-called “limited-tier” subscription streaming — including the likes of Amazon Prime, Pandora Plus, Peloton and other fitness or restricted streaming options — grew 18% to surpass $1 billion, coming in at $1.1 billion overall. And ad-supported streaming — like YouTube, Spotify’s free tier or revenues from TikTok — moved up 6% to $1.8 billion, making up 11% of all revenues for the year.
The average number of paid subscriptions in the U.S., meanwhile, reached 92 million, up 9.6% from the 84 million that existed in 2021. (The RIAA notes that this does not include limited-tier subscriptions, and counts “multi-user plans” as one subscription. The overall paid streaming figure of $10.2 billion includes limited-tier.) That growth, while significant given that it is higher than overall revenue growth, is down in both actual numbers and percentage growth for 2021, as was the revenue growth gleaned from paid subs, suggesting that while there’s still room to go higher and records continue to get broken, there may be a slowdown in subscriptions in the future.
Outside of those streaming figures, digital and customized radio revenue — paid out by services such as SiriusXM — inched up 2% YoY, even as SoundExchange payouts declined 3% to $959 million; those other ad-supported platforms such as SiriusXM and other internet radio services grew 28% in revenue during the year, contributing $261 million to the overall pie. That ends a few straight years of growth from SoundExchange distributions, though the overall figure of $1.2 billion from digital and customized radio in general has remained relatively flat for the past several years.
Also within the digital realm, downloads continued their stumble down the proverbial cliff, dropping 20% across the board — both for tracks and for digital albums — to total $495 million in revenue ($242 million for tracks, $214 million for albums). The RIAA notes that in 2012, digital downloads made up 43% of the overall industry’s revenue; in 2022, that number was just 3%. Factoring other formats, total digital revenue was $13.8 billion, up 6.0% from 2021, or 87% of the total business.
For the first time since 1987, vinyl LP units outsold the number of CDs, 41.3 million to 33.4 million (vinyl overtook CDs in revenue in 2020), as its year-over-year growth streak stretches to 16 years — old enough to drive. Total physical revenue was up 4% in 2022 to $1.7 billion, of which $1.2 billion came from vinyl — up 17% YoY, making up 71% of physical revenues. CD revenue, meanwhile, continued to decline despite the one-time pandemic boost of a few years ago, down 18% to $483 million in 2022. Synch revenue also grew, up 24.8% to $382.5 million.
“2022 was an impressive year of sustained ‘growth-over-growth’ more than a decade after streaming’s explosion onto the music scene,” RIAA chairman/CEO Mitch Glazier said in a statement accompanying the report. “Continuing that long run, subscription streaming revenues now make up two-thirds of the market with a robust record high $13.3 billion. This long and ongoing arc of success has only been possible thanks to the determined and creative work of record companies fighting to build a healthy streaming economy where artists and rightsholders get paid wherever and whenever their work is used.”
Alliance Entertainment’s plan to go public through a reverse merger with Adara Acquisition Corp. — a special-purpose acquisition company (SPAC) — got sideswiped by the collapse of the SPAC market.
While the deal was finalized Monday (Feb. 13) and Alliance Entertainment is now a publicly traded company, it leaves the media wholesaler without the initial intended benefit of reaping tens of millions of dollars in new funding to continue making acquisitions to fuel growth and to modernize its warehouse equipment.
That’s because only Adara shareholders owning 167,00 shares (out of 10 million total) have chosen to participate as stockholders in the merged entity. As a result, Alliance Entertainment only received about $1.67 million, which likely isn’t enough to cover the legal and investment banking fees for the transaction.
Alliance Entertainment Holding
The company’s light stock float also leaves it ineligible to be listed by the New York Stock Exchange as originally planned, so now Alliance is being carried on the OTC pink-sheet marketplace.
Alliance Entertainment — which carried a $480 million valuation going into the deal — remains a formidable powerhouse as a one-stop rack jobber and independent distributor and overall entertainment software wholesaler, however. While the company brought in $28.62 million in net income on revenue of $1.42 billion for its fiscal year ended June 30, 2022, it lost $8.34 million on sales of $238.7 million for the three-month period spanning from July to September.
Alliance Entertainment announced its plans to go public via a SPAC reverse merger in June 2022. At that point, investor excitement over the SPAC route to public listings had already cooled from its high in 2021, but by the end of the year, it had totally tanked. And even if Alliance Entertainment didn’t raise as much money as it had hoped by going public, there are other benefits. As a publicly traded company with audited financial statements that need to surpass the scrutiny of the Securities and Exchange Commission, it should now be able access capital and options to raise funding through debt beyond its previous reliance on bank loans.
“We believe that today’s milestone combined with our strong revenue growth, expanding customer base and product offering, and several successful acquisitions, will help accelerate our future expansion initiatives,” said Alliance Entertainment CEO Jeff Walker in a statement. “Alliance Entertainment today is well positioned to continue to capitalize on shifts towards eCommerce and Omni-Channel strategies, especially with retailers and manufacturers’ vastly increased reliance on their DTC (Direct to Consumer) fulfillment and distribution partners. We are at an inflection point that now positions us to execute a multi-prong growth strategy that we expect will deliver a double-digit revenue growth rate with strong cash generation to the bottom line.”
Alliance Entertainment serves as a physical music, movies and video games wholesaler to retailers including Amazon, Best Buy, Target, Kohls and Gamestop, as well as independent stores; it’s also a rack jobber to chains like Walmart and Barnes and Noble. It additionally provides e-commerce fulfillment to many of those retailers and runs its own online websites including Deepdiscount.com, Popmarket.com, Importcds.com, Critic’s Choice Video, Collectors Choice Music and Movies Unlimited, while fielding its own brands on eBay, Amazon Marketplace and Discogs as well. In total, nearly $540 million, or 38% of Alliance’s revenue, is generated through the above online sales.
In total, Alliance says it stocks over 485,000 unique entertainment products from Microsoft, Nintendo, Activision, Electronic Arts, Sega, Funko, Disney, Warner Home Video, Universal Video, Sony Pictures, Fox, Lionsgate, Paramount, Warner Music, Sony Music, Universal Music, Mattel, Lego, Hasbro, Arcade1Up and another roughly 500 entertainment product manufacturers. Within that, the company also fields independent distribution companies like music distributor AMPED, video distributor Solutions and video game distributor Cokem that exclusively carry over 57,000 vinyl, CD, DVD and video games titles combined.
“This business combination [with Adara] will further enable our significant focus on a strategic roll-up strategy of acquiring and integrating competitors and complementary businesses which we believe will drive an accelerated competitive position and value creation,” said Alliance Entertainment chairman Bruce Ogilvie in a statement. Being a publicly traded company will allow for further investment, he added, in automating facilities and upgrading proprietary software, which he said makes management “confident we can grow revenue and expand margins.”
Ogilvie continued, “We will also continue to expand into new consumer product segments, growing our product offering and providing more to our existing customer base while attracting new customers in the process.”
Walker and Ogilvie retain nearly 95% ownership in Alliance Entertainment and their shares are subject to an extended lock-up period.
In 2020, after years of steady growth, the vinyl market exploded. Sales climbed over 46% in the United States, according to Luminate. Then, remarkably, they jumped another 51% in 2021.
But in 2022, that growth plummeted to a rate that was far more pedestrian: Luminate reported that sales were up a little more than 4%. (Pull two juggernauts — Taylor Swift‘s Midnights and Harry Styles‘ Harry’s House — out of that number, and growth was less than 1%.) Year-over-year growth also fell in the United Kingdom from 23.2% to 2.9%, according to the British Phonographic Industry.
“Some labels report sales are down,” says Nick Gordon, chief partnership officer at Symphonic Distribution. And big retailers like Walmart offered some titles at a heavily discounted price around the holiday season, stoking fears among the smaller players that those stores had overbought — maybe an indication of slackening demand.
Despite these figures, Gordon believes the vinyl market remains “healthy.” And several of his peers — from distributors to indie-label heads, chain stores to independent retailers — also seem unruffled by the slower growth. “It corrected the market,” says Todd Oenbrink, sales director for All Media Supply, a Florida-based indie wholesaler.
“It feels like a welcomed return to normalcy,” agrees Terry Cole, founder and owner of Loveland, Ohio-based store Plaid Room Records and the label Colemine Records. “It feels way healthier. This industry is not set up for rapid growth.”
And according to Russ Krupnick, managing partner of the market research company MusicWatch, “core metrics” in the vinyl market are still “showing strength.” “Our initial look at the data from 2022 is indicating that the number of vinyl buyers is still holding up,” he continues. “And in early projections, it looks like the used vinyl market is going to be up by double digits.”
During the first two years of the pandemic, demand for vinyl grew like crazy, outpacing production capacity. But retailers, distributors and manufacturers consider those two years an aberration — from 2015 to 2019, year-over-year growth ranged from around 9% to 17%.
When few music fans were going to shows due to COVID-19, “vinyl took a far greater share of music fan spending than it would otherwise take,” says Stephen Godfroy, director and co-owner of Rough Trade, which saw 30% growth in vinyl sales in 2022. “We saw exuberance for all sorts of things during the peak COVID era — vinyl, Netflix, cooking lessons, home improvement,” Krupnick notes.
Now listeners “are spending money on other things — going out drinking, going out eating, going to gigs — whereas they couldn’t do that much in lockdown,” says Peter Quicke, chair of independent label Ninja Tune. (Vinyl sales for Ninja Tune rose over 25% in 2022.) Even so, vinyl sales still grew.
With higher prices for raw materials and labor, the cost of records has also increased, another potential growth dampener. Several independent store owners expect major-label prices to increase again in 2023. “We keep hearing there are more [price hikes] to come,” says John Kunz, owner of Waterloo Records in Austin. “I wonder how that 10- or 20-something shopper is going to be able to afford that.”
Price sensitivity, especially in an uncertain macroeconomic climate, is a chief worry in the independent record store owner and label community. Already “we see customers backing away from the high prices for new releases,” says Michael Kurtz, co-founder of Record Store Day.
But at the same time, the vinyl industry’s production capacity is expected to rise in 2023. Slower growth last year “was less about people suddenly not wanting to buy as many records and more about the amount of records available to purchase,” says Cameron Schaefer, CEO of Vinyl Me, Please. (VMP sales were up 15% in 2022.) “The biggest limiter on growth is just pressing.” “We could have sold much more vinyl in 2022 if only we could have gotten hold of more supply of the right product,” Godfroy agrees.
Independent labels are still struggling with long turnaround times, executives say, which leads to missed sales for their artists — especially when an album doesn’t hit stores and streaming services at the same time. But more plants are coming online — Vinyl Me, Please expects to have its own new plant operational this year, for example — and existing facilities are adding capacity.
There are other potentially positive signs. Krupnick published a study on “the vinyl revolution” in 2022 which found that the most common barrier to buying records was “I don’t have or want to buy a turntable;” similarly, Luminate’s year-end report noted that only 50% of vinyl buyers have a record player. But “when Harry Styles came out last year, we saw a spike in turntable sales,” says Crissi Bariatti, music buyer at Barnes & Noble. “We are converting a lot of new vinyl fans” who might purchase LPs for years to come. (The chain had an “amazing December” for vinyl sales, and “January numbers are great” as well.)
Fluctuation in growth isn’t uncommon, of course. “Ebb and flow in vinyl sales over short periods” is natural, according to Scott Hagen, CEO of Victrola, a product of “what the new releases are, what the availability is in that moment in time, and what the general traffic in retail is.” (That was down in the fourth quarter of 2022.) Schaefer from Vinyl Me, Please predicts that “the next two years will give a much better preview of what to expect from the vinyl industry in the long term.”
“People got excited by high numbers in the years prior,” he continues. “If we can get to 10% a year, stay there and do that well? That’s healthy.”
BRISBANE, Australia — It’s closing time for Sanity, the once-great Australian music retail specialist which confirmed it would close all its bricks-and-mortar stores in the coming months.
In a statement issued Wednesday (Jan. 4), Sanity announced plans to close its remaining 50 stores by the end of April 2023, in line with the lease expiry of each outlet.
It’s a sad end to a music and entertainment chain which, like so many brands in the business of racking physical soundcarriers, has been left behind as consumers move to streaming platforms.
“With our customer shifting to digital for their visual and music content consumption, and with diminishing physical content available to sell to our customer, it has made it impossible to continue with our physical stores,” explains Sanity CEO and owner Ray Itaoui.
Despite the “challenging and ever evolving entertainment landscape,” the Sanity business has “prospered and remained successful for many years, quite an achievement in the fast-changing retail space,” Itaoui adds.
Founded by retail guru Brett Blundy, Sanity began life in 1980 with just one store. The retailer grew to become Australia’s leading music and retail chain, a status which has later challenged by JB Hi-Fi.
With Blundy at the helm, his Brazin company entered the U.K. in the early 2000s with the purchase of 77 Our Price branded stores from Virgin Group. The experiment ended in 2003 when Brazin sold its 118 Sanity Entertainment U.K. stores to an investment firm for an estimated £12 million ($16.67 million).
A consortium led by Itaoui acquired the business from Brett Blundy Retail Capital (BBRC) in 2009, when the Sanity chain boasted 238 stores across Australia, including Sanity and the domestic branches of U.K. High Street brands Virgin and HMV.
In the late 2000s, Sanity launched what it claimed was Australia’s first online music subscription service, LoadIt, at a time when the business had an estimated 23%-25% share of Australia’s physical music retail market. LoadIt shut down in early 2009.
Digital platforms, and streaming, in particular, is how Australians consume music in the 2020s.
The recorded music market in these parts expanded by 4.4% to A$565.8 million ($421 million) in 2021, for the third successive year of growth, according to trade body ARIA. Subscription services, contributed $377 million ($281 million) that year, up 4.1% from A$317 million ($236 million) in 2020.
Sanity’s online business will continue to operate, and the team is currently working to dispatch all over-the-counter orders, including pre-orders.
“There is so much to be proud of,” adds Itaoui. The Sanity brand “became synonymous with the go-to place to get anything that mattered in the world of music: from vinyl, to CDs and DVDs, hardware, accessories, and of course face to face advice on everything musical.”
For over a decade, Taylor Swift has been offering fans a multitude of options when it comes to purchasing her albums across physical formats with exclusive editions available through a longstanding partnership with Target. But with her new album, Midnights, out Friday (Oct. 20), she’s truly outdone herself.
There are over 20 different versions of the album available on CD, LP and cassette in various colors, with different cover artwork, censored and uncensored, with and without autographs. That plethora of options is great for fans who may want a different version than their friends, or who — as many seem to — feel driven to collect them all. It’s also great for Swift, who’s earning more money from increased sales that will impact her performance on the Billboard charts and likely add up to one of the year’s best album debut weeks.
Few artists, if any, attract as much attention as Swift does for her promotion and sales strategy, thanks largely to her close relationship with her fans. In turn, she is brilliant at developing physical goods they want to buy, in addition to just streaming her music. Last year, following the release of her re-recordings of Fearless and Red, she accounted for one out of every 50 albums sold in the U.S., according to Luminate. She knows Swifties are collectors, and is now providing not only the multiple Midnights versions but elaborate containers to put them in, like a $39 CD clock or vinyl clock for $49, which display the four albums in a timely format, or $79 faux-leather vinyl collector’s case.
In today’s streaming-centric music industry, physical albums have become collectible tokens of fandom, and artists have been responding to growing demand. BTS and other K-pop megastars regularly rack up huge numbers by selling CDs and LPs with different colors and exclusive postcards and photos sold as collectible items, with the music as a secondary benefit. When South Korean boy band Stray Kids’ MAXIDENT topped the most recent Billboard 200 chart for the week of Oct. 22, it did so with 10 CD versions, including autographed CDs and exclusive Barnes & Noble and Target releases. Increasingly, it’s becoming a mainstream strategy for acts in the U.S., too. Such disparate acts as Denzel Curry and Slipknot have recently released various physical versions of their new albums as well. It just so happens that these sales all count towards an album’s Billboard chart performances. So by offering four different versions of Midnights per format, Swift is at least quadrupling her revenue from some super fans, as well as their impact on the charts.
Based on Billboard‘s research, here is a full rundown of the different Midnights versions fans can buy:
CDs:Moonstone BlueBlood MoonMahoganyJade Green
Signed CDs:Moonstone Blue (Webstore Exclusive)Blood Moon (Webstore Exclusive)Mahogany (Webstore Exclusive)Jade Green (Webstore Exclusive)
Clean-version CDs:Moonstone BlueBlood MoonMahoganyJade Green
Vinyl LPs:Moonstone BlueBlood MoonMahoganyJade Green
Signed Vinyl LPs:Moonstone Blue (Webstore Exclusive)Blood Moon (Webstore Exclusive)Mahogany (Webstore Exclusive)Jade Green (Webstore Exclusive)
Cassettes:Moonstone Blue
Target Exclusives:Lavender Deluxe CD (With Three Bonus Tracks)Lavender Vinyl LP
Digital:Moonstone Blue (Webstore Exclusive)Moonstone Blue (Clean) (Webstore Exclusive)Standard – 13 TracksStandard – 13 Tracks (Clean)Standard – 14 TracksStandard – 14 Tracks (Clean)
For the record… We’re hiring!” reads the lawn sign in front of Nashville’s United Record Pressing, the largest vinyl pressing plant in the United States. With an expansion underway that will bring in 48 new presses — upping the manufacturer’s count to nearly 100 and more than doubling its total output from approximately 40,000 to over 100,000 units of vinyl per day — the need to staff up is crucial. And URP isn’t the only Tennessee plant on the prowl.
As the vinyl boom continues — the format generated $570 million in revenue through June 2022 (up 22% year over year), according to the Mid-Year 2022 RIAA Music Revenue Report — pressing plants around the world are not only striving to keep up with demand but planning how to get ahead of it. Tennessee is aiming to take the lead, increasing its number of plants from two to five in 2022 and planting a flag as the U.S. vinyl hub. The state offers advantages in distribution, in taxes and, most notably, in culture.
“All music resonates from Tennessee,” says Brandon Seavers, CEO of Memphis Record Pressing (MRP), which was founded in 2014 and is undergoing its own $30 million expansion. “We really take pride in our musical heritage.”
“We’ve got wine country in California,” adds Drake Coker, CEO of Nashville Record Pressing, one of three new manufacturers that have come online in the past year in Music City. “Tennessee is going to be vinyl country.”
The growth in Tennessee’s vinyl production capacity is substantial. MRP — owned by Czech Republic-based GZ Media, the world’s largest vinyl record manufacturer — is adding 33,000 square feet to house 36 new presses to be up and running by early 2023; NRP, also owned by GZ Media, opened in June. Physical Music Products, a smaller plant with three presses currently online (and five more expected by early 2023) that was founded by Nashville-based mastering engineer Piper Payne, opened in March, and The Vinyl Lab, a music venue and boutique two-press plant, has been operational since April 2021.
“Nashville is exploding right now,” says URP CEO Mark Michaels. He cites everything from “attractive” economics and state tax rates to the presence of tech giants like Amazon and Oracle as drivers for the city’s growth.
And, as Coker points out, an estimated 75% of the U.S. population lives within a 24-hour drive of Nashville, making it what he calls “a distribution heaven.” (Nashville and Memphis are centrally located to two of the country’s major distributors in Franklin, Ind., and La Vergne, Tenn.)
It’s not just proximity to distributors that makes Nashville and Memphis ideal cities to house a pressing plant. The Vinyl Lab founder Scott Lemasters believes it’s about proximity to everything. “The components that you need to make a record: the mastering houses and studios, the people who cut the lacquers. There’s even a plating facility in town. Everything is within a 10-minute radius,” he says. “Half our jobs are just running around town.”
But not everything can be done locally, and surely not everything can be sourced locally. So how did so many plants within one state manage to break ground on expansions or entirely new facilities all at once — and during a global supply-chain shortage?
Michaels believes URP, which was founded in 1949, had a bit of luck on its side. After the plant relocated to its current, larger facility in 2017, Michaels never thought it would need to further expand. “And then, as we saw 2020 and the growth of vinyl, it created an incredible acceleration and demand,” he says. “All of our customers were just crying for capacity.” By the top of 2021, URP decided to grow its operations yet again — fortuitous timing, with Michaels noting that supply-chain challenges got much worse soon after.
It’s something Seavers can attest to as well. At the start of 2021, MRP booked three-and-a-half months of work in five weeks. “It was more than a flood,” he says. “It strained every system that we had.” With the financial support of GZ Media, MRP added another 36 presses to its facility for a total of 52, which will eventually boost its vinyl units per day from 36,000 to 130,000. “Having GZ behind it all really has been key,” says Seavers.
The hustle to get GZ-backed sister plant NRP operational is further proof of how essential that kind of backing can be for a plant at any stage and of any size. For decades, GZ has been building a family of plants across North America, including Precision Record Pressing in Ontario. It was that plant’s president, Shawn Johnson, who approached Coker about relocating to Nashville to head up the newest sibling. Coker arrived in fall 2021, secured a space for NRP by December (because of Nashville’s current growth, he says commercial real estate was hard to come by) and started construction and operations in March. He compares the process to a plane leaving the runway as it’s still being built.
Capital and technological support from GZ have allowed that plane to take off, fueled by already existing customer relationships. “Every record that we can make in the next four years is already presold,” Coker says. “Who gets to start a company and not worry about sales?”
The Vinyl Lab — a multifunctional space that includes a pressing plant and a venue that will open in October — has enjoyed a similar safety net from the start. Scott first conceived the idea for The Vinyl Lab in 2015 and, after a series of setbacks, leased its space in January 2020. The following December, the Grand Ole Opry called. The Opry had continued holding shows in an empty hall during the pandemic, recording each one and eventually choosing 12 performances to release as an album — which it wanted on vinyl. “They called us, and we were like, ‘Our machine is not even in its final resting spot yet,’ ” he recalls with a laugh, noting he secured the company’s first Phoenix Alpha press in 2019. “We were fully transparent with [the Opry]. That order was due on June 3, and we delivered it on June 2.”
Lemasters, who operates The Vinyl Lab alongside Clint Elliott and Heather Gray, says their orders have mostly been word-of-mouth (in addition to ads they posted in bathroom stalls). He praises both the city and the vinyl community as a whole for the eagerness to help one another, recalling the time Jack White and Ben Blackwell of Third Man Records referred Dualtone Records to The Vinyl Lab, which led to a steady flow of work early on.
“That’s what’s great about the industry right now, is that we are still in a very collaborative phase,” says Seavers. “We would never be where we are if we hadn’t had that.”