Vinyl and Tomorrow is Record Store Day

[jon]

Vinyl Turns the Table on the Music Industry
By Robert Milburn
PENTA DAILY (part of Barron's)
April 17, 2013, 12:51 P.M. ET

Last year, The Sunday Times reported that actor Bruce Willis was thinking about suing Apple over the ownership rights of his vast collection of digital music. Apparently disgruntled over Apple’s licensing agreement, Willis was rumored to be discussing with lawyers whether he could set up a trust to pass his “vast collection” of music along to his children. All of this proved unfounded of course, when Willis’ wife, Emma Heming-Willis, tweeted “It’s not a true story.” Nevertheless, media outlets were abuzz, saying the exaggerated reporting did “raise potentially significant issues about ownership of digital music.”

What tends to frustrate people about iTunes, and other digital platforms, is that users are essentially leasing their music library, with downloads subject to Apple’s licensing restrictions that prevents sharing and duplication. Services such as Spotify have stepped in to fill the gap by charging a monthly fee to access its vast, searchable music database. Users then link to Facebook and “share” playlists, songs, and albums with their friends. But for some, digital interfaces still leave too many intangibles. Perhaps due to those frustrations, a growing subsection of album purchasers are reverting to physical formats, particularly vinyl records.

Neil Young’s autobiography, Waging Heavy Peace, contains a vitriolic diatribe about the unquestionable sound quality of vinyl over digital. He muses that the return of quality sound would present music as a deeper more meaningful experience rather than “a cool pastime or a toy.” Young’s insight may explain why 2012 marked the fifth straight year of record LP sales, totaling 4.6 million. While that may pale in comparison to the 1.7 billion in overall album equivalent music sales, its 17.7% growth trounces the overall category’s 3.1% increase even beating the growth in digital albums, up 14.1%. Indeed when the Consumer Electronics Association projects 40% growth in turntable sales this year, the trend seems to have legs.

What is driving the resurgence? A survey by the organizers of Record Store Day revealed that 81% of vinyl consumers were below the age of 35. “A lot of people have grown up hearing music via compressed digital files,” says Steve Wengert, senior vice president of distribution at Universal Music Group, “When they hear a needle drop on a turntable for the first time, the experience is mind blowing.” While this younger generation forced Adele to the tops of the digital charts last year, the new breed of audiophile enthusiasts also snapped up more than 30,000 units Blunderbuss by songwriter Jack White.

Wengert identifies college students as the primary drivers of growth pointing to vinyl sales at indie stores like Urban Outfitters and the explosion of the trendy, high-end headphone market as proof that younger consumers are actively seeking quality sound. Since 2008, Universal’s subsidiaries, including labels like Def Jam, Virgin and Blue Note, have made significant forays into the market. Among its most popular vinyl reissues was the release of a Beatles complete box set, that bundled the band’s 12 U.K. releases, the Magical Mystery Tour and both volumes of Past Masters. On Record Store Day, Universal will distribute 10 exclusive titles, with albums by The Roots, Ben Harper and Pink Floyd.

The other side of vinyl’s resurgence is its increasing collectibility. “Rare records are outperforming the stock and bond market,” claims Ian Shirley editor of the Rare Record Price Guide, who adds “It’s also a tangible asset translatable to money at any time, not like your money in the Bank of Cyprus.” Shirley’s statements are obviously hyperbolic but when questioned further he notes entry points are key.

Among the Rare Record Price Guide’s most valuable is The Beatles debut album Please Please Me, particularly the rare version with the Parlophone black and gold labeling. But Shirley advises collectors look for albums released in the mid to late 90s when labels were switching to CDs and not pressing many records. Look for albums by David Bowie or Bob Dylan. A good reference is the website Popsike, which aggregates all records sold on eBay.

Vinyl is certainly not an alternative in the average investor’s portfolio but more likely an enjoyable way for music enthusiasts to indulge in exclusivity and growing demand perhaps profiting in the act. This year’s national Record Store Day on April 20th could be the time to cash in.

[hagopian]

I played vinyl on the air until the late eighties. Give me vinyl any old day.

Some of the stuff I have bought from Itunes, sounds like it was recorded by Harpo Marx.

I think Vinyl is here to stay.

Cool.

[PMC]

One bean counter says to another, CD's retail for $30, we needed to get the lower price point market, and vinyl works for us