creative deconstruction

‘Physical Fanatics’ Continue to Embrace Vinyl in a Post-iTunes World

Posted on 31. May, 2010 by refe in NEWS, STRATEGY

Record Store Day 2010

Even as many in the music world continue to trumpet the death of the physical release format there is growing evidence that these claims have been grossly exaggerated.

There is no denying that digital has taken hold of the music-listening market. Digital sales continue to climb, and new records are set every few months by artists such as Lady Gaga, The Black Eyed Peas, and others.

However, there is also no denying that the revenue being driven by digital sales pales in comparison to the figures the recording industry once saw during the ages of vinyl and the CD. The new artists might not notice the deficit, but the old-timers and record label executives have certainly felt the pinch in a big way.

The album post-iTunes

At a recent conference in the UK called ‘Never Mind the Box Set: The Album Post iTunes,’ participants bemoaned the negative by-products of the new digital world.

“We have cheapened music so badly,” admitted Paul Conroy, formerly of Virgin Records U.K. and one of the panelists. He pointed to the inflated prices of the past decade as one cause of the CD’s decline. “It was greed and short-termism because we wanted gratification today and we screwed up.”

The participants acknowledged what the DIY music world has understood for years now – that relying on digital downloads as a primary revenue source is very risky due to the ease of digital copying. “If one CD ends up on 10 different iPods, how do we make money?” asked Steve Bunyan of Union Square Music. (Please join me in welcoming Steve to the 21st century…)

Physical releases in the 21st Century

In response to the uncertainty surrounding the recording industry as a whole, there was some interesting data presented that sheds a positive light on the sale of physical formats such as vinyl and collectible box sets.

The most interesting information came from a report by the IFPI, which is based in London and represents the recording industry world-wide.

The report was described as the ‘first ever industry-wide segmentation of the British music-buying public.’ It concluded that revenue from music sales was not behaving the way the industry pundits and analysts were predicting it should. In 2009 73% of music sales in the UK were from physical formats such as CDs and vinyl, with only 19% digital, and the remaining 8% consisting of performance rights.

The report itself doesn’t appear to be online, but you can read Billboard’s coverage here.

Not all consumers are the same

73% is a big deal. It means that while many have shifted their music consumption habits to digital downloading (whether legal or illegal) there is still a healthy subsection of consumers looking to spend their money collecting physical formats, particularly vinyl.

This data might be surprising to many new music industry pundits, but it’s encouraging news for musicians and record labels.

The IFPI report actually breaks the total physical spend down into different categories, including Physical Fanatics, Traditional Physicals, and Digital Dabblers. Each category, as the names suggest, exhibits a different blend of music-purchasing habits. I think these are great distinctions, because they avoid the kind of blanket generalizations that cause artists and record labels to throw all their eggs in one basket – the way so many have done with digital.

Musicians and labels would be wise to pay attention to these demographics because they could provide useful insights into how their particular audience wants to consume their music.

For example, if you are only selling (or giving away) digital downloads, you may be missing out on a significant number of fans that would be interested in purchasing physical products such as vinyl records. Those vinyl record sales mean revenue. It doesn’t take an MBA to understand that if your fans are willing to give you money for something, you should be offering it.

Vinyl is alive and well

It may sound like common sense to offer multiple formats for your fans to choose from. Unfortunately, the DIY movement has been so zealous in declaring digital the Savior of the Unsigned that many have forgotten that there are still many, many people out there who want something physical to purchase.

It’s all part of a natural progression. Something new arrives on the scene and the industry watches as it begins to take hold of the market. They see that nice upward trajectory and the projections begin to grow more and more fantastic with each passing month. Digital is going to take over the world! The CD is dead! Physical releases are dead! The ALBUM is dead!

Is the CD dead? If it’s not it certainly seems to be on its last breath. But physical releases in general? The album itself?

I wrote an article a few months back about a resurgence of vinyl records that continues to grow even as CD sales – and recorded music sales in general – continue to decline. That data, along with the information collected by the IFPI report, suggest strongly that we all jumped the gun a bit in our doomsday projections.

More people are buying vinyl records. The majority of these vinyl releases seem to be special editions with unique packaging, or box sets that give a new depth and design edge to an existing catalogue. These types of releases use the sonic advantage and nostalgia of the vinyl format to give fans something of value. And, so far at least, fans have proven that they’re willing to pay for that value.

Artists – are you taking advantage of this?

Photo credit: Tom Mcshane.

Related articles:

• What Do At&t’s New Bandwidth Caps Mean for ‘iTunes in the Cloud?’
• What does it take to earn a living with digital music?
• Ignore the Real World: Blogging the Start Up Experience

Tags: cd, MUSIC INDUSTRY, records, release strategies, vinyl