Retail data in albums sales show the vinyl format is growing steadily year over year. According to Billboard.com, LP sales only made up two percent of all album sales. But if you lend your ear to the market, you’ll see two key relationships: 1) the US audiophile is undergoing a mass breakup with the CD, and 2) digital downloads aren’t proven to cannibalize vinyl record sales.
And the key segment that helps drive vinyl record sales is the 20-somethings, the so-called Millennials. Last year showed and proved that a renaissance in an “old” format carries its own weight within the music industry. Though vinyl sales accounted for only two percent of total album sales in the United States in 2013, the format leaped 32 percent in sales over the previous year.
Now about these 20-somethings and the vinyl boom. Though sales by age range aren’t available, a record store vendor might assure you high consumption by college-age students is more than likely. In an article published by the Kansas City Star, the uptick in demand for LPs these past few years is the first in a quarter-century.
The popularity might be (wrongfully) assessed as due to the new wave of “hipster” fixation with vintage trends (such as clothing, integral to my “hipster” generation.) But when a major retailer like Whole Foods Market, for example, begins retrofitting its image as an LP dealer (in five stores last summer, initially), it’s worth a second look to see the buying behaviors within the small but significant share.
Though the supermarket doesn’t quite ride the same supply-demand curve as other retailers such as Urban Outfitters and Amoeba (both on the LP sales frontier historically longer), Whole Foods honchos are quite strategic about adding records to their inventory. By December 2013, the market added wax to 8 more outlets, placed in popular college towns across the nation.
In comparison to CD sales, the LP continued its gradual resurgence in 2013, with the latter medium hitting 6 million units. Compact disc sales declined 14.5 percent, year over year. Digital album sales dropped by nearly 6 percent. Vinyl sales, on the other hand, grew by 32 percent on a steady upward trend since 2007, with sales averaging about 1 million units annually through the end of 2013. In general, digital albums comprise 41 percent and CDs just above 57 percent of the market share, compared to wax at two percent. Cassettes and DVDs make up a remainder of formats at just a fraction of a percent. Overall album sales suffered an 8.4 percent decline, year over year, from 2012 to 2013. The decline is likely due to growing interest in streaming music.
Vinyl’s renewed interest might be viewed as an artistic statement of ownership, especially to an industry that fully embraced moving digital properties to server- and cloud-based libraries. With growing buyer-ship among the college-age, Slate reported Daft Punk’s Random Access Memories a retail virtuoso (an album boosted by the popularity of segment-fave Pharrell Williams). And about 65 percent of LPs were sold at independent music stores last year.
These milestones set the stage for a endless battle between the artist and the complex, as the compensation model evolves. The record label shareholder still, more or less, has governance over artistic properties regardless of medium. And more is at stake for the musician who must also be a savvy and inventive business-person. Such behind-the-scenes challenges do impact demand for physical (i.e. vinyl) and digital (i.e. streaming) alike. By that rationale, the young consumer will always remain on the side of the musician.
CHART: STATISTA
