Vinyl will save the record industry


How is the music industry coping with the changing times?
Last Christmas, Apple reported that traffic on iTunes went up by a staggering 413 per cent, as users filled up the iPods they got for Christmas with digital music or redeemed their gift cards.

This was a sign of the digital revolution, right? We are on a path where CDs, box sets and vinyl will be replaced by MP3s and iTunes gift cards as the gift of choice for the music fan, surely …

Well, don’t jump to that conclusion so fast. Record labels are working hard to make physical products more attractive. And, while the digital market will always be present, those who’d rather spin than download their music are being offered more and more choice.

And, ironically, the world of recorded music could be saved by … good old 33 and one-third RPM records.

“Vinyl is one of the biggest growth areas that we’ve experienced,” says David Gawdunyk, manager of Megatunes Edmonton.

Actually, over the past couple of years, Gawdunyk’s sales of both CDs and vinyl have regularly increased, which flies in the face of the current gospel, which suggests record shops are taking a beating at the hands of Apple and other download distributors.

According to statistics from the Recording Industry Association of America, vinyl occupies only a small share of the marketplace. The RIAA states in its 2006 Consumer Trends report—the 2007 edition won’t come out until the end of the year—that record companies only realize 0.6 per cent of all their sales through vinyl. That’s about the same number as 1996.

But, according to local retailers, it is trending upwards, defying industry stats. And labels, especially the indies, are doing more to entice buyers to make the return to good old-fashioned LPs. Efforts to make vinyl more attractive to buyers can’t be ignored, and it will be interesting to see if vinyl’s market share jumps in the 2007 RIAA report.

“Dance vinyl had always held its share, but now more and more people want vinyl releases and, really, anything goes on vinyl,” says Gawdunyk. “For example, the last Bob Dylan album, we sold 50 to 60 units on vinyl. Old people were buying it. Kids were buying it. And these people are also buying CD copies of the album, as well. Really, it could be that, while record companies have tried various formats to replace the basic CD—from commercial DAT, which died, to SuperAudio discs, it could be the old vinyl which eventually replaces the CD. Or, it could end up saving the CD.

“The quality of vinyl now is a lot better than we saw in the ‘70s or ‘80s. Now, it’s not mass-produced, so a lot of it is pressed on high-quality 180-gram or 140-gram vinyl.”

The new emphasis on vinyl is echoed by one of Canada’s top indie labels, Mint Records.

“In general, we are releasing more vinyl and, when we do so, we often include coupons so [customers] can also download a digital format of the album,” says Yvette Ray, publicity rep for Mint.

Other major US indies, such as Matador and Sub Pop, are also dropping download codes into their vinyl packages, or placing CDs into the packages that can easily be copied onto a buyer’s computer. Example? Sub Pop is releasing a live album from grunge legends Mudhoney that is coming out on vinyl only. But each album comes with a download coupon—and the label promises that each song will be available at a bitrate of 192 kbps, which offers better sound quality than most compressed digital files.

While the increase in vinyl interest is very real, there is no doubt that CDs are still by far the leader when it comes to the physical format of choice for music fans. But CDs, because discs can be burned so easily, are the most vulnerable to piracy. So, many labels and artists have chosen to be more creative in how CDs are packaged. More needs to be done in order to make a listener choose a CD over downloading the same collection via iTunes.

So, what are the labels doing? More than ever, we are seeing popular albums re-released with bonus discs or DVDs filled with concert footage and b-sides. Some include tracks that aren’t made available to the download sites.

Maybe the most ambitious release you’ll find this Christmas season is the “Executive Edition” of the New Pornographers’ Challengers album, from Matador Records. The Vancouver band’s release will be repackaged with three screen-printed blank recordable CDs. Those blank CDs can be used to get bonus material from a website, from concert performances to video to previously unreleased tracks. Once finished, the set will be transformed into a do-it-yourself box set.

If not audio-visual extras, some labels and artists are certainly putting extra work into their packaging. Fresh off the buzz of the acclaimed Ian Curtis biopic, Control, Warner has re-released new digitally-enhanced versions of Joy Division’s old Factory Records discography, with bonus discs and plenty of additional artwork. And Hacktone Records has caused a stir with its presentation of The Salvation Blues, from former Jayhawk Mark Olson. The package looks like a “mini-novel,” says Gawdunyk.

But, according to Duncan McKie, the head of Canadian Independent Record Production Association, “while there has been some advancement in terms of how CDs are packaged, it’s not true for the industry as a whole.

“I wonder if we’ve become so focused on the digital world, if the development of the physical products have come to a standstill,” he continues. “I just received a CD today. It’s a nice CD with a couple of pictures, but I don’t know if that’s any different from a product that came out a couple of years ago.”

While some labels are willing to spend the extra money for bonus tracks and deluxe packaging, some can’t or aren’t willing to put the added dough into a format which might not come anywhere close to making a return on investment. And, according to McKie, that’s especially true in the case of younger acts that don’t have track records of sales success.

“When you are working on a FACTOR grant or some of your own band’s money, you have got to be careful,” he says.

When a band or label can make as much as $20 000 out of a sync deal that places music in an advertisement or film, the CD is often being seen more as a loss leader than as an avenue for profit. By releasing a CD, an artist or agency wants to get the music out to the public in the hope that it will lead to more lucrative tours or commercial deals. So, why spend extra bucks on packaging or extras?

“Some artists want to limit their liability,” says McKie. “They want to get the music out and then use that to explore other revenue streams.”
So, there are really two sides to the argument. But one thing can’t be questioned; that those who are in the market for CDs aren’t spending nearly as much as they used to. In order to make CDs more competitive with albums being sold for $9.99 on iTunes, labels have slashed prices.

“It makes sense,” says Kris Burwash of Edmonton’s Listen Records & CDs. “The price drop has helped. CDs are finally being priced in the realm of what people are actually willing to pay for them. Most CDs are now available for under $20. Over the last two to three years, the price for CDs has dropped 25 per cent.”
But will lower prices and extras—from the labels that can afford them —keep customers coming? While consumer studies show that 30-somethings are still loyal to buying physical musical product, the jury is out on a generation of teens who are growing up with digital players. As Burwash notes, many young fans are being weaned on MP3 players and computer speakers, and have never listened to music on vinyl or CD, and not on a great stereo system.

“It’ll be interesting when we get a new generation of kids who are used to the sound quality of MP3s,” he says. “And they think that the sound of a compressed file is as good as it gets.”

And Radiohead’s new set is going to take packaging and choice a virtual step further. On Dec 11, EMI is releasing the entire Radiohead back catalogue in one box set. Buyers of the set have been promised access to exclusive online content. But EMI will also be releasing the entire box set on a USB stick in the shape of a bear, with all songs captured in CD-quality WAV files. And, the set will also be available to be downloaded in 320 kbps mp3 files, which offer much better sound quality than the tracks for the band’s In Rainbows album, which has been available online for months.

Miles Leonard, Managing Director of the Parlophone imprint, said in a release, “We are delighted to offer new and existing fans the chance to get Radiohead’s albums in a box set. We are particularly excited about the USB stick, which gives fans an easy and portable way to carry the box set and provides another way of bridging the world between online and off-line content.”

It will be interesting to see which format gets the most enthusiastic response, but personally, I’m going to hold out for EMI to release the set on vinyl. V

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