Oil pushes up prices


Vinyl LPs in groove again, but oil prices to send a jolt

Sales increase by 77 percent over last year Vinyl LPs in groove again, but oil prices to send a jolt
Thursday, July 24, 2008

The Oregonian

By Luciana Lopez

(Originially published on 7/24/08)

The good news for record fans: Interest in vinyl is way up. The bad news: So, thanks to higher petroleum prices, is the cost.


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Even as sales of physical CDs are tanking, vinyl records, though still a niche product, are enjoying a resurgence, with sales of both new and reissued albums taking off. But because vinyl is a petroleum product, the soaring prices for oil mean collectors need to brace themselves for anticipated price increases.

"It's kind of cool again with a brand-new generation of people," said Terry Currier, the owner of Music Millennium in Portland, Oregon. Vinyl has sold so well there lately that Currier is rearranging the floor space to bring vinyl up to the main from the downstairs level. "You knew vinyl was taking a good, strong hold when Costco and Wal-Mart started carrying USB turntables."

Those turntables, which plug into a computer's USB port, have helped make vinyl more accessible. Album art also comes across far better in the large LP format, bringing out details and allowing for more nuance in the images. But ultimately, Currier notes, vinyl just sounds better.

"Listen to an mp3 and listen to a good piece of vinyl and the sound quality is amazingly different," he said. "We're bringing in everything that we can get our hands on."

More labels, as well, have begun including a code for a digital download with their vinyl sales so consumers don't have to choose between the sound of vinyl and the portability of a digital file.

"I think the idea of selling vinyl with an mp3 download code is genius, and that's helping vinyl's popularity grow," Erika Lerner of Seattle's Barsuk Records wrote in an e-mail. "It seems pretty rad to buy a record (old-fashioned) and get the songs digitally (new-fashioned) at the same time."

Everyone from Elvis Costello to Disney has caught on, with new vinyl releases being announced every week. Fred Meyer now is selling vinyl, though the chain got into the game inadvertently, when an employee ordered R.E.M.'s new album, "Accelerate," on vinyl accidentally earlier this year. Still, Fred Meyer put the vinyl on the shelves, only to watch it fly off. A pilot in 60 Fred Meyer stores went so well, spokeswoman Melinda Merrill said, that the chain will now stock vinyl in all its stores with an electronics section.

Fred Meyer isn't alone. By this time last year, Nielsen SoundScan had tallied 454,000 vinyl records sold; so far this year, the number is 803,000, a 77 percent increase; 2008 vinyl sales could reach an all-time SoundScan high of 1.6 million, the company predicts.

In contrast, CD sales are down 16 percent from this time last year, and digital albums are up by 34 percent, less than half vinyl's rate of increase. But vinyl remains unlikely to make up for the sales slippage in CDs because downloads and actual CDs still sell in the tens of millions, while records are only a minor portion of the recorded music market.

But while dollar record boxes of future yard sales are getting a new supply, vinyl pressings are expected to get pricier because of the higher price of petroleum, from which vinyl is made. The pressing plant used by Seattle's Sub Pop records, for example, recently raised its prices, citing petroleum costs as one reason.



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At United Record Pressing in Nashville, Tenn., Jay Millar, director of marketing, noted that the industry is based, in every sense, on petroleum, from the vinyl itself to the oil that keeps the machines lubricated to the gas used to transport records, which are heavier than CDs.

"Realistically there's not a component involved in our manufacturing that hasn't gone up," he said, noting that the company is weighing a price increase. "I think it's inevitable."

Putting an album out on vinyl is a bigger commitment than making a CD, said Mike Jones, the CEO of CDForge in Portland. Last year, the company's volume of vinyl work doubled from 2006, and Jones expects a similar increase this year. The basic cost of a CD is about $1 a unit; for vinyl, which is a more labor-intensive process, it's more like $4 to $8 a unit for the initial pressing. "The artist and the record label really have to believe in its importance," he said.

CDForge doesn't press vinyl itself; they deal with Rainbo Records, in California, where the cost of vinyl's gone up since the start of the year.

"It's gone up 11 percent since January 1st, and I understand another increase is coming, about a 4 to 6 percent increase," Steven Sheldon, the company president, said. Including gas prices, the per-record cost has probably gone up 20 to 22 cents a record, he said.

Though price increases aren't ideal, he said, he doubts the price bump will be enough to drive away consumers.

Ironically, record sales are softer in one area where they stayed strong throughout the years: among DJs. For years, DJs kept record culture alive, spinning vinyl in clubs.

"So many DJs over the past couple years have switched over to playing mp3s versus vinyl," said Aaron Marquez, owner of 360 Vinyl in Portland. Marquez, who spins under the moniker DJ KEZ, remains a vinyl stalwart. His store now deals more in hip-hop, he said.

Because so many dance labels are small, independent outfits, they can't absorb price increases, such as the cost of gas, as well, Marquez said, squeezing them out of the vinyl market. "I've been involved in this business for 8 or 9 years," he said. "I've seen prices go up a lot."

Some small labels and artists, though, are still willing to take a chance on vinyl. Portland indie media cooperative Tender Loving Empire, for example, is putting out the new Boy Eats Drum Machine album, "Booomboxxx," on vinyl in September. The label does particularly intricate and beautiful album art, often by visual artists who work with the company on other projects, such as comic books.

Jon Ragel, the artist behind Boy Eats Drum Machine, is subsidizing the label's expense in pressing the record, said Jared Mees, who co-founded the collective. Creating 300 vinyl records will cost more than 10 times as much as pressing a similar number of CDs, he said.

Ragel had to convince Mees about choosing vinyl, but it was an easy sell. "It didn't take much," Mees said. "The packaging is going to be beautiful."

Luciana Lopez: 503-412-7034; lucianalopez@news.oregonian.com

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