If you don’t think ownership matters to consumers — think again. There are some who like to throw “nostalgia” into the ring when it comes to explaining the rebirth of vinyl but I don’t know too many people willing to stand in line in the rain for 3 hours to buy a record for the sake of “nostalgia.” Having participated in both Record Store Day events so far in 2021 with RSD Black Friday on the horizon, I’ve spent a lot of time in less than ideal weather conditions speaking with people who have communicated that ownership and sound quality matters to them. According to the latest sales figures, physical media sales are booming.
Cynics will push back and tell you that streaming is already 84% of the market and stop pushing antiquated older formats because nothing could be better than digital streaming.
Except vinyl playback and high-end CD players but I digress.
When you look at where vinyl was less than 10 years ago (barely 0.5% of the market) and where it is now on a global basis — we’re talking about a billion dollar business just in terms of physical records and that’s driving a lot turntable and cartridge sales. Category leaders like Pro-Ject Audio Systems can barely keep up with demand and they are fighting supply chain issues like everyone else.
According to the Recording Industry Association of America (RIAA), which is a trade organization that promotes the financial vitality of major music companies, “Recorded music revenues in the USA grew 27% in the first half of 2021 versus the prior year, from $5.6 to $7.1 billion at retail value.
Paid subscriptions continued to be the strongest contributor to growth, comprising nearly two-thirds of total revenue, averaging more than 80 million paid subscriptions for the first time.
The effects of Covid-19 continued to affect the industry, and year-over-year comparisons are significantly impacted by store closures, tour cancellations, and other disruptions from both 2020 and 2021.”
Revenues from streaming music grew 26% to $5.9 billion in the first half of 2021. Streaming accounted for 84% of total revenues for the period.
Vinyl LP sales increased from $240.9 million in 1H 2020 to 467.4 million during 1H 2021. Americans purchased over 20M new records in H1 2021; none of this data includes used record sales so it’s very clear that vinyl has more than solidified itself in the market.
Physical compact disc (CD) sales grew from $142.7 million to $205.3 million (43.9% increase) during those same periods.
An interesting category called ‘Other Physical’ grew from $2 million to $6.8 million (a 230.3% increase). Could this be audio cassettes?
The #1 revenue producer for the music business is paid subscription streaming, which grew from $3.31 billion to $4.13 billion (24.9% increase).
Spotify, Apple Music, Tidal, Qobuz, and Amazon Music HD are showing strong signs of growth and it’s rewarding to see the two audiophile streaming platforms growing with mainstream consumers.
Physical media sales so far in 2021 give reason to celebrate because consumers need hardware to play it back and it would appear that the industry has an opportunity to capitalize on this momentum — now all we need are those damn chips and turntables.