Labels are cashing in on vinyl and people aren’t buying it.
Vinyl records, once left for dead, are spinning a comeback story, with sales increasing around 10% year-by-year. But, this revival may be a short-lived one.
Here’s the rub: as price tags creep up to $75 for a single album, the industry risks pricing out the very fans fueling its resurgence.
The Pricey Problem
From a niche hobby to a mainstream trend, vinyl has come so far over the years.
In 2023, vinyl LP sales in the U.S. hit 43.2 million units, up 6.6% from the previous year, according to the RIAA. And that’s not just a blip on the radar. This shift has pushed revenues to $1.35 billion, which is a 10.3% jump from 2022.
Because of this, vinyl LPs accounted for 71% of all physical format revenues, outselling CDs for the second time in a row since 1987.
The momentum hasn’t slowed in 2024 either.
Luminate’s 2024 Midyear Music Report shows vinyl LP sales reaching 24.7 million units in the first half of the year. That’s another 10% increase from the same period in 2023!
But here’s where things get sticky.
New releases and reissued classics are routinely priced between £44.99 and £59.99, with some special editions soaring to £74.99 or around US$50-$100, according to the Music Business UK 2023 Q4 report.
The industry seems to be pushing the envelope, and many of us are wondering if they’re about to push too far.
Why Is Vinyl Getting More Expensive?
The rising cost of vinyl isn’t just about greedy execs trying to squeeze more pennies out of our pockets. It’s a complex mix of factors that’s driving up prices such as:
- Production costs have increased significantly. The raw materials, especially PVC, have seen huge price hikes. Add to that the labor-intensive nature of vinyl production and a shortage of skilled workers, and you’ve got a recipe for higher manufacturing costs.
- There’s a severe imbalance between supply and demand. The vinyl comeback caught the industry with its pants down, leading to a shortage of operational pressing plants. This bottleneck allows existing manufacturers to charge premium prices, and who can blame them?
- Vinyl is now treated as a premium product rather than a mass-market item. Many of us view vinyl as more than just a way to listen to music – it’s a collectible, a piece of art. Because of this, labels now use better materials and fancier packaging, which are just additional costs.
- The market has shown a willingness to bear these high prices. Despite the price hikes, sales are still increasing. So, labels and retailer don’t really see a reason to tone it down, yet.
Multiple Variants and Artificial Scarcity
Price hikes are just part of the problem, though. Labels, artists, and retailers have also found a way to squeeze more cash from consumers. And that’s through the use of ‘variants’.
The 2024 Luminate Midyear Music Report reveals that the top 10 best-selling albums of the year featured an average of seven different vinyl variants per title.
This isn’t just a vinyl thing either. The top 10 U.S. physical K-Pop albums also had an average of 14.6 CD variants and 3.7 LP variants through the first half of 2024.
So, from a sales perspective, the variants strategy is a holy grail. But at what cost to the community?
Many fans feel pressured to purchase multiple copies of the same album to complete their collections, leading to what some critics call “exploitation of fan loyalty.”
This sentiment is echoed in online forums and social media, where fans express frustration at the financial burden of keeping up with multiple releases.
Take Taylor Swift’s “windowing” and variants strategy for the Midnights album for example:
The focus on collectibility over music appreciation may also be alienating casual listeners.
When half of vinyl buyers don’t even own a record player, according to Luminate’s data, you have to wonder if we’re losing sight of what vinyl is really about: the music.
Passion for Vinyl vs. Financial Reality
The vinyl resurgence is a beautiful thing. It’s driven by nostalgia, audiophile appreciation, and a desire for tangible music experiences in our increasingly digital world. But the current market dynamics are creating tension between this passion and financial realities.
Vinyl enthusiasts often cite the format’s warm sound, large-format artwork, and the ritualistic experience of playing records as key attractions. This emotional connection to vinyl has allowed the format to command premium prices.
However, as prices continue to climb, even the most dedicated fans are feeling the pinch.
This is something a lot of others agree.
Fans understand that the costs of producing and distributing vinyl are rising. But for many, these price jumps still feel hard to swallow.
How the Threat Is Creeping In
Yes, vinyl sales are still good. But, a shift in the market perspective and behaviors can already be seen.
For one, as vinyl prices continue to climb, many music enthusiasts are reconsidering their purchasing habits. Because of this, many are switching from collecting vinyl to collecting CDs.
So, CDs – once thought to be on their way out – are experiencing a resurgence of their own.
In fact, Ross Meyerson, a record store employee, has also observed this in his store.
This shift is not just anecdotal.
Luminate’s 2024 Midyear Music Report shows CD sales reached 16.3 million units in the first half of 2024, hot on the heels of vinyl’s 17.4 million. This narrow gap suggests CDs are quickly catching up to vinyl, which may soon break vinyl’s two-year reign.
Not everyone is completely jumping ship, though. Yet, many fans are pumping the brakes on their vinyl purchases.
Worse, people are resorting to buying counterfeit vinyl or bootlegs as they come cheaper than the original ones, and often with some bonus such as colored pressings or additional tracks.
In fact, a single counterfeit seller was able to launder £1.2 million (US1.5 million) from fake vinyl sales before getting caught recently.
But perhaps the most concerning aspect is how these high prices are affecting potential new fans. Younger generations, who’ve been driving much of the vinyl revival, may find it increasingly difficult to enter the market.
“I understand why people like vinyl, but I just don’t have the space or money for it.” says one user.
“Apple Music with lossless audio to two speakers with a separate DAC converter can be had a reasonable price, And sounds just as good to me. But I do miss out on the nice tactile feel of setting the needle on the vinyl.”