Are We in a Vinyl Bubble?
Record collecting is at peak popularity, but will it last?
As recently as ten years ago, record players and vinyl collections were exiled to DJs, as well as to the attics of the world, abandoned as conversation-starters and displays of taste. Only the hermit-esque, obsessive collector still dedicated living-room space to stacks of musty 12-inches, cursing the CD revolution as he flipped his records.
In 2015, however, the trendiest wall art is the LP collage and a 25-year-old is about as likely to have a record player in her apartment as a CD player. The market for boutique record shelving has never been healthier. Vinyl is cool again, confusing the thousands of dads who packed away their LPs and tried out that new Walkman their kids bought them for Christmas. Now those same kids are buying their pops the new Springsteen reissue on vinyl.
Forbes reported in May that vinyl sales have increased 260% over the last five years. Over this time, we’ve seen the rise and fall of Insound, Urban Outfitters (and Hot Topic!) getting into the record-selling game, Record Store Day ballooning to ungodly scope (and drawing its fair share of criticism), something people called “the Netflix for vinyl,” along with the persistence of Discogs, Amazon, and eBay as online vinyl purveyors. It seems as if everyone wants a piece of that physical music pie — even Barnes & Noble are having their own knock-off “Vinyl Day.” The days of HMV and Tower Records are gone, but big money, major-label machinations are still at play in the vinyl industry today. It is necessary to ask with any booming industry — like the housing market pre-2008 or the tech industry now — are we in a vinyl bubble?
With the explosion of the vinyl industry outside of the traditional record shop, it is also fair to ask what has become of the mom-and-pop independent record store — what percentage of that 260%-increased pot are they seeing? In 2010, the UK’s Telegraph reported that three-quarters of all (British) independent music shops had closed in the last decade. Anecdotally, it’s easy to see — record stores have long been displaced from prominence in high-pedestrian traffic, high-rent areas, consolidating to smaller spaces if they had the capital and will to survive the early-2000’s lull in record sales. What’s the outlook for independent record shops now that demand has grown? Brick-and-mortar retail is suffering across-the-board — what’s to keep the major labels and online business from edging out the little guy in the marketplace?
Modern record stores come in myriad shapes and sizes. The resiliency of many stores that sold vinyl through the down times can be attributed to the stores filling niche markets. Vinyl retailers adopted CDs and cassettes, quartering the amount of space necessary for stock, doubling profit margins, and satiating the thirst of the music-buying public that had ditched wax. But that revenue stream dried up as digital music came to the forefront — what was a record shop to do if the public didn’t want any physical music? The smart ones didn’t dump their LPs or radically alter their business model to cater to fleeting markets (or they had enough cash on hand to carry themselves through the dark years); they still stocked CDs, LPs, and cassettes, but many took to selling comics, DVDs, books, video games, or music memorabilia. When you can buy a record in the same place as you buy a DVD online, it only became natural for brick-and-mortar businesses to become that one-stop media outlet.
As all media moved online, stores that adapted to sell more diverse merchandise reaped the benefits — it was no longer you versus the shop down the street, but you versus shopping online. The pool narrowed, the pot grew, and independent shops were left fighting for scraps after most of the money moved online. Of course, there are some shops that haven’t changed since the 70s — if you have a steady, loyal clientele that doesn’t give a hoot about the newest music format and they aren’t in jeopardy of running out of money or dying off, you can attain stability as a record store. All of this is to say that each record store that is active today has taken a unique path to maintain its existence often influenced by factors such as its location, reputation, and customer base.
There are a few broad, binary ways that a record store can be classified; there are no two stores that are exactly alike in terms of style and disposition, but we can reduce this complexity to a couple representative qualities. The first divide is the new versus used record split. Generally speaking, shops that have been open (or have been selling vinyl) for a smaller period of time will stock (and draw customers who want) more new vinyl (at a higher price point than used). Longer-tenured shops have the benefit of years of accumulation, connections with overstock suppliers, and the know-how to navigate estate sales that allows them to stock cheaper, used vinyl. These shops cater more toward collectors interested in buying twenty rare, $1 12-inch singles than the guy who wants the new Adele album.
Second, we can categorize a shop by the amount of physical music sales they do — whether music or other goods (DVDs, etc.) make up the majority of their revenue: is it primarily a record store or does it make ends meet with other merchandise? Shops can be classified by online presence, as well — do they sell their stock online (via Discogs, eBay, etc.) as well as in the store?
Last — and most contentious — is the issue of Record Store Day. The mere mention of Record Store Day can send a record store owner flying off the hinges. Many shops embrace Record Store Day as a focal point of their year — a way to increase awareness of the shop and do instantaneous high-volume, high-price business. Some owners vehemently oppose it as the thinly-veiled hand of major labels reaching into the coffer of the independent vinyl-seller, hijacking the momentum that the vinyl resurgence has brought.
Record Store Day (RSD) started in 2007 as an annual April-based event to “celebrate and spread the word about the unique culture surrounding nearly 1400 independently owned record stores” (their words). The party has grown to include a Black Friday iteration and a sister endeavor, Cassette Store Day. Each year, hundreds of exclusives are pressed in small quantities, making RSD releases rare and (sometimes) valuable. Fans line up outside of participating stores, rapt to get their hands on their sought-after releases (or to buy 10 copies of the same record to flip online — a major point of contention with the anti-RSD crowd). Stores get business, fans get cool stuff — seems like a win-win, no?
My first inclination that something was off with RSD was in 2012. Looking for Destroyer’s Destroyer’s Rubies, I went to my local record store and frantically searched to no avail. The clerk told me they ordered it — and a guy just walked off with all 10 of their copies (fear not, I copped the sweet red vinyl at my other shop). Pressing on, I saw about 20 copies each of The Flaming Lips And Heady Fwends and Metallica’s Beyond Magnetic on silver vinyl left over after the more popular releases had been picked over (I picked up the Lips but didn’t ever play it — RSD hooked me with the novelty, I’ll admit). Every time I came back, I saw the same 20 copies of the Lips and Metallica sitting untouched, still bearing $20+ price tags. That said, there are a few problems with RSD.
- There are too many releases. In 2014, there were 438 RSD releases. That is simply too many for any independent shop to make wise decisions on stocking. Regular customers can let the store know what releases they want, but the owner is still stuck leveraging large amounts of money guessing what the drop-in customers will want — you have to stock big or risk disappointment.
- The print runs are too small. Stores can’t guarantee that they will get all, if any, of their order because there is so much competition to stock hot releases. Smaller pressings create novelty and value for fans, but it leaves store owners out in the cold — they’re stuck buying all of their stock at once, rather than gauging reception and restocking. Plus, the rush to get so many unique releases out on a certain date gums up the scant few vinyl presses still left, shafting non-RSD bands that want to get an album out on time.
- The records are too expensive. When the RSD rush has settled down, the problems with small runs and guessing what the clientele will buy magnify. RSD records, being limited and often special (colored vinyl, picture disc, etc.), have a minimum-$20 price point, more than most new records. They cost more than normal for the stop to stock, too — that’s money sitting on the shelf. When the novelty has worn off and sticker shock sets in, RSD releases are left on the shelf to linger. This leads to the what I refer to as the dreaded Beyond Magnetic Syndrome, where overstocks simply won’t sell.
Record Store Day has been great to increase awareness about independent record shops, but you have to wonder if it’s threatening to smother the stores it claims to celebrate. RSD is at risk of becoming too big and too expensive for stores to handle — with so many RSD records being re-sold online and the questionable availability of titles in local shops, what’s to stop the customer (or RSD itself) from going online-only? Will the independent shop be left behind in the dust of big money? Given the complex, fragmented nature of the vinyl industry in 2015, I turned to the experts — the record store owners — to contextualize the trends and figure out what keeps a physical record store afloat in the current retail climate.
Benny owns Music City in Vestal, NY, a 34-year-strong staple of the Binghamton music community that sells LPs, CDs, and music equipment (guitars, amps, etc.) and offers instruction in guitar and other instruments. Benny says the last five years have been a great boon for the shop, with a noticeable uptick in LP sales; vinyl sales now make up 50% of Music City’s sales, with 60% of those sales being used vinyl. Benny doesn’t sell his stock online like some other owners, as Music City is not in need of storage space — it’s not necessary for them to list records online to clear out room to shelve new ones.
Given that Benny does 40% of his LP sales on new vinyl (a relatively high percentage), he has warm feelings toward Record Store Day (RSD titles are considered “new,” even the numerous reissues). Music City has been participating in RSD since 2011 and it has long been a focal point of the fiscal and advertising year. Benny says he’s seen a younger audience in the past few years as RSD has brought notoriety. In a small town like Vestal with only two record stores, RSD helps Music City grow its profile. Customers can search for nearby participating stores on the RSD webstite, and with a lack of competing shops, Music City draws a large crowd, many of whom may have been unaware of the shop before RSD — and some of whom will become regular customers.
Still, RSD is unpredictable. “You gamble, and it’s not written in stone until it happens,” Benny admits of the guessing game involved in stocking. Asked about his role as a small-town record store owner, Benny is thankful that the sea of competition for RSD is manageable — much more so than in an environment with 20 record stores in 10 square miles, where “the guy that does the best job promoting it will get the bulk of [sales].” Music City, then, is smart to embrace RSD the way it does. By making themselves one of the only places to go, they’ve minimized the potential for the pitfalls of RSD.
Sarah is a manager at Sound Go Round (SGR), also located in Vestal, NY. After remodeling their vinyl section about 5 years ago, SGR has reaped the benefits of the record boom. SGR is more a media shop (comics, video games, etc.) than a strict record store, however — it only does 15% of its sales on LPs (of which 90% are used). SGR does sell online, but only the super-rare records that are too expensive to shelve.
Given the fact that SGR does most of its business off non-vinyl items (and the vinyl they sell is mostly used), RSD is not as celebrated as it is at Music City. Sarah echoes common complaints: “you hope to get 30% of what you order”; RSD is a profit-sink with higher stocking prices; reselling is too common. Still, SGR participates to “keep their regulars happy.” Although it may not be as big of a promotional event as it is at Music City, SGR still uses RSD to build customer rapport, giving back to the crowd that comes in to buy records (which does not cross over heavily with those buying other media, Sarah tells me).
With RSD adding marginal profit to SGR’s yearly income, it has found other ways to embrace the vinyl boom. Sarah tells me that Christmas season shopping heavily eclipses RSD in terms of vinyl sales. Christmas is when, by definition, people are buying things that aren’t for themselves; people who normally wouldn’t buy records are sifting through the stacks. SGR functions as a one-stop gift shop for the season — stop in and buy an LP for your dad and a video game for your younger brother. Instead of betting the house on vinyl, SGR has found a smart way to involve it in their grander sell-it-all strategy, allowing them to reap the profits of the vinyl explosion without unnecessary risk.
Reed is the owner of In Your Ear Records in Boston, MA, one of the longest-tenured shops in the area, 33 years strong. This is your quintessential vinyl shop — 80% of their revenue comes directly from LPs. In Your Ear has been selling records online for 15 years, which helps cull the stuffed-to-the-brim stacks and make room for new arrivals.
Over the last five years, Reed agrees that business has picked up and the clientele has gotten younger, but he is quick to voice skepticism on the 260% growth rate. “There’s a lot more people trying to sell records” as compared to the peak of store closures in the early 2000s, he reminds me, mentioning Urban Outfitters and Discogs. Reed posits that the vinyl explosion is happening online, not necessarily in independent shops. Although recent growth at In Your Ear has been undeniable, Reed finds the 260% figure to be misleading in its effects on mom-and-pop record stores.
In Your Ear in Boston does not participate in RSD (although their store in Rhode Island does) — in fact, In Your Ear is about as anti-RSD as you’ll find, given that most of their business is predicated off of used records. Reed detests the “music industry concoction” that “encourages people to shop one day.” He remembers the days of “second hand stores [getting] kicked around by the major labels” and is wary of them trying to “buddy up” again. Plus, Reed adds, “we never think anything that involves standing in line is a good idea.”
As a strict LP seller for 30+ years, In Your Ear survived without RSD, and they will continue to thrive in spite of it. Reed claims they don’t need the “false excitement” that RSD creates — with a fanbase as rabid and consistent as that at In Your Ear, flashy promotions are unnecessary. With a business strategy solid enough to survive decades, In Your Ear has no reason to worry about RSD — they’ll just sit back and enjoy the slight bump the vinyl boom has brought.
Planet Records, open in various incarnations throughout Boston since 1983, is owned by John. After hitting a low point for vinyl sales in the late 90s, Planet now sells 40% LPs and 60% “other” (95% of their vinyl sales are used). Planet sells a substantial amount online, about 40% of their sales since they started in 1997.
Like In Your Ear, Planet is the crate-digger’s paradise, stacked wall-to-wall with frequently-refreshed LPs. Similarly, Planet caters to a regular, tenured customer base — not “guys coming in looking for the latest Taylor Swift album.” Unsurprisingly — with so many of sales being used — there is not a large demand for RSD at Planet. John instead claims while “every day is Record Store Day at Planet,” he does put out some special records from his collection on RSD , as foot traffic increases noticeably and he tries to accommodate. John likens RSD to older music industry marketing ploys; he thinks RSD has “overplayed its hand.” John hasn’t seen his clientele skew younger in the past five years, either. Along with In Your Ear, Planet belongs to the class of legacy record stores unconcerned with what they see to be passing trends — when you make it through the 2000s selling to a passionate batch of regulars, you tend not to have much concern for RSD.
Although sales across-the-board for vinyl have reportedly risen 260% in the last five years, the state of the independent record store is still in limbo. Everyone wants to reap the benefits of a new fad, and there is no shortage of ventures springing up hoping to capitalize on the vinyl craze. Stores that have survived are thankful for the slight boost in traffic, but are wary of the possibility of a post-RSD world where vinyl is uncool again. It is clear that the shops that have survived have pursued persistent niche markets and not fleeting trends.
Music City has succeeded in cornering the new record crowd and its embrace of RSD. However unlike so many shops that have been burned, Music City spreads its eggs into many baskets, banking on the persistence of the instrument market to back their music sales. Sound Go Round has created great crossover exposure for their vinyl by housing it in a shop with all different types of media, drawing the curiosity of those on the fringe of the vinyl boom. In Your Ear and Planet have relied on a consistent cadre of customers to carry them through the tough mid-2000s and into the present of inflating demand.
But what becomes of the shops when the major labels get tired of vinyl again? “There have been many different record revivals,” Reed from In Your Ear tells me, speaking ominously of the crash of the current vinyl boom. But as long as independent record stores avoid the trappings of hype and RSD-like trends that threaten to implode, they stand a good chance of seeing the next one.
If you enjoyed reading this, please click “Recommend” below to help to share the story with others.
