They were left for dead with the arrival of CDs in the 1980s. They had been gathering dust in the attic of every house for years. And now, they are once again the most popular and highest-grossing physical format in the music industry. The reasons are many and varied: the rise of collecting, the remarkable sound quality or simply the physical experience of music in an era of digital ephemeral. Sales have exploded in the last decade. And the pandemic only increased the phenomenon.
But there is a problem. A pretty big one. Getting more and more vinyl made is a challenge in the middle of 2021. There are no factories, there is a shortage of materials and a fully melted distribution chain.
Sales. Last year, vinyl sales topped CDs for the first time. Global sales that year reached almost 1,000 million euros. And in the first six months of this year, 17 million vinyl records were sold in the United States, generating 450 million in retail revenue, nearly double that of 2020, according to the Recording Industry Association of America. In the UK, there were 4.8 million sales, an increase of 10% due to the pandemic. In Spain, 1.2 million vinyls were sold that year, an increase in its turnover of 24%.
Physical recordings are now only part of the overall music business but they also serve as a strong indicator of fan loyalty, and stars like Taylor Swift and Drake are making vinyl an important part of their marketing.
Not enough production. However, there are worrying signs that the vinyl boom has outpaced the industrial capacity needed to sustain it. Production bottlenecks and reliance on decades-old pressing machines have caused unprecedented delays. A couple of decades ago, they could be done in a month, now it can take up to a year, wreaking havoc on artists’ release plans.
Not even the most famous stars are spared. In a BBC Radio interview, Adele, whose album 30 comes out in November, and it will surely be a success, he explained that its release date had been set six months ago so that the vinyls and CDs would be made on time. Suffice it to say, in 2017 Sony reopened its Japanese press plant after 30 years, the clearest sign of a major that it wanted to do something about the vinyl renaissance.
Problems. Music and manufacturing experts cite a variety of factors behind this problem. The pandemic shut down many plants for a time, and obstacles in the global supply chain have slowed the movement of everything from cardboard and polyvinyl chloride, the material that records are made of, to finished albums. In early 2020, a fire destroyed one of only two plants in the world that make lacquer discs, an essential part of the disc-making process.
But the most important problem is simply supply and demand. Consumption has grown much faster than the industry’s ability to make records. And the business is built on an outdated infrastructure of pressing machines, most of which date back to the 1970s or earlier and are very expensive to maintain – they can cost up to € 300,000 each. Worse, there are ridiculously few lathes in existence, or at least the large capacity ones needed to mass produce discs. In general, there is a lack of knowledge, professionals, machines and shipments.
The big labels, in search of the cake. For several years now, the biggest labels in the music industry, such as Universal and Sony, have jumped on the vinyl bandwagon, for better or for worse. In this Investment Monitor report, various “indie” record labels relate how some major labels are paying the world’s largest vinyl presses to commit their machines to their orders only. This is best summed up in the transformation of Record Store Day, and how a mini, non-corporate version of Black Friday for vinyl has been made into a marketing tool.
Worse, there are ridiculously few lathes in existence, or at least the large capacity ones needed to mass produce discs. The lack of resources seems to affect the entire chain. There is a lack of knowledge, professionals, machines and shipments.
Why Central Europe dominates the industry. Very few countries can mass produce discs. Although the UK is home to the largest number of pressing plants in Europe, the largest and most famous are found (by far) in continental Europe, namely Germany and the Czech Republic. Vinyl was close to its total demise in the early 2000s. Both countries, like the UK and the US, used to have large stocks of old vinyl machines. However, during the industry’s decline in the 1990s and 2000s, the UK and (to a greater extent) the US disassembled and sold most of this equipment in the face of what appeared to be the inexorable rise in CDs.
Meanwhile, the Germans clung to their machines, like the Czechs, mostly thanks to government subsidies. The Czech Republic, along with Poland, used to be a key vinyl producer for the Soviet Union, an industrial legacy now worth its weight in gold. Bottom line: Central Europe leads the world in vinyl production thanks to its monopoly on original machines, the skills required to run them and the cost of its labor. The problem now is with the record companies. And the fans, of course.