{"id":79324,"date":"2023-01-16T04:00:04","date_gmt":"2023-01-16T09:00:04","guid":{"rendered":"https:\/\/quotulatiousness.ca\/blog\/?p=79324"},"modified":"2023-01-15T16:16:12","modified_gmt":"2023-01-15T21:16:12","slug":"the-music-industry-fails-to-capitalize-on-the-vinyl-revival","status":"publish","type":"post","link":"https:\/\/quotulatiousness.ca\/blog\/2023\/01\/16\/the-music-industry-fails-to-capitalize-on-the-vinyl-revival\/","title":{"rendered":"The music industry fails to capitalize on the vinyl revival"},"content":{"rendered":"

It’s kind of hard to believe, but the companies that control the pressing of music into vinyl appear to have no clue about the business they’re in<\/a>:<\/p>\n

\"\"<\/a>

“Framed Vinyl Album Art: America ‘Homecoming’; Nick Gilder (Studio Copy of Singles From ‘City Lights’ Chosen for AOR); Climax Blues Band ‘FM Live’)” by JoeInSouthernCA<\/a><\/span> is licensed under CC BY-ND 2.0<\/a><\/a><\/p><\/div>\n

I’d heard so many grand claims for the vinyl resurgence, but the reality was tremendously disappointing. And I was a late adopter \u2014 the revival had been going on for a decade, but record labels still didn’t have their act together.<\/p>\n

In my case, I ended up buying vinyl albums, but mostly used ones. I simply couldn’t find new pressings of the records I wanted. This was fine for me, but lousy for musicians and labels \u2014 who make no money on the sale of a secondhand vinyl album. <\/p>\n

I have some experience in these matters \u2014 in my alternative career<\/a> I worked with CEOs chasing after fast growth product categories. I know how they handle these situations. But, really, it’s no mystery. The strategies you use in this kind of business are very straightforward:<\/p>\n

    \n
  1. You add manufacturing capacity aggressively<\/strong> \u2014 to make sure you have enough product to fuel growth.<\/li>\n
  2. You bring down costs by getting scale advantages<\/strong>. But this only happens because unit costs drop as volume increases. So the single biggest goal is to grow sales as hard and fast as possible.<\/li>\n
  3. You constantly reduce prices to keep demand building<\/strong>. In some cases, you even set prices below your costs to accelerate growth rates. When I originally saw companies do this I was skeptical \u2014 how can you make profits if you sell below your costs? But I soon learned that you eventually got a huge payback.<\/li>\n
  4. You keep expanding the product line<\/strong>, so that you constantly have something new and exciting to sell to every potential buyer.<\/li>\n
  5. You invest in R&D<\/strong> so that you eventually have a next generation technology to keep the growth going over the long haul. <\/li>\n<\/ol>\n

    None of this is easy to do, but it isn’t impossible. It just takes investment, focus, management commitment, and hard work. And later you reap the benefits. You turn a small business into a huge one, and enjoy a big payday. <\/p>\n

    The record labels could have done that with vinyl. It was taking off \u2014 unit sales doubled in just 5 years. And these sales were insanely profitable, because much of the demand was for old music. So labels didn’t even have to pay to sign artists, and cover the costs of recording sessions. The music was already there, with the fixed costs amortized long ago.<\/p>\n

    They just had to press the bloody album and ship it to the store. How hard is that?<\/p>\n

    But what did the music industry do?<\/p>\n

      \n
    • They hate running factories<\/strong> \u2014 which is hard work. So they tried to outsource manufacturing instead of building it themselves. Chronic shortages resulted.<\/li>\n
    • They refuse to spend money on R&D<\/strong>, so they stayed with the same vinyl technology from the 1950s. In other words, the record business became the only entertainment industry in the world with no plan for technological innovation. In the year 2023, even bowling alleys, bordellos, and bookies are more tech savvy than the major record labels.<\/li>\n
    • They want easy money, so they kept prices extremely high<\/strong>. That was bizarre because their R&D and catalog acquisition costs were essentially zero, and they could have priced vinyl aggressively. Instead they treated vinyl as a luxury product, even as they dreamed of it also becoming a mass market option. But you can’t do both without a careful market segmentation strategy \u2014 which the labels never even started thinking about.<\/li>\n
    • They love hype<\/strong>, so they focused on high visibility vinyl reissues, which look good in press releases, but couldn’t be bothered to make back catalog albums available. After a decade of the vinyl revival, they still hadn’t taken even basic steps in offering a wide product line. <\/li>\n<\/ul>\n

      This is a lazy strategy \u2014 and the exact opposite of what they should have done. And the results are, of course, predictable. <\/p><\/blockquote>\n","protected":false},"excerpt":{"rendered":"

      It’s kind of hard to believe, but the companies that control the pressing of music into vinyl appear to have no clue about the business they’re in: I’d heard so many grand claims for the vinyl resurgence, but the reality was tremendously disappointing. And I was a late adopter \u2014 the revival had been going […]<\/p>\n","protected":false},"author":1,"featured_media":35193,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[831,28,13],"tags":[261,859,428,200],"class_list":["post-79324","post","type-post","status-publish","format-standard","hentry","category-business","category-media","category-usa","tag-management","tag-manufacturing","tag-marketing","tag-music"],"jetpack_featured_media_url":"https:\/\/quotulatiousness.ca\/blog\/wp-content\/uploads\/2016\/06\/favicon.png","jetpack_shortlink":"https:\/\/wp.me\/p2hpV6-kDq","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/posts\/79324","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/comments?post=79324"}],"version-history":[{"count":1,"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/posts\/79324\/revisions"}],"predecessor-version":[{"id":79325,"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/posts\/79324\/revisions\/79325"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/media\/35193"}],"wp:attachment":[{"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/media?parent=79324"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/categories?post=79324"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/tags?post=79324"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}