The Vinyl Revolution: The True Story Behind The Record Industry's Incredible Revival

the vinyl revolution

It was missing, presumed dead. But after a decade of growth, in 2017, vinyl has passed a billion-dollar milestone. Author Gareth Murphy explains the story behind our beloved format’s spectacular comeback…

Why does this 130-year-old format keep refusing to die? Ask 10 music lovers what’s so special about vinyl and you’ll probably get 10 theories, that also reveal something about the people themselves. “You can hear all the work that’s been put in!” exclaimed John Lydon of the way in which, compared to CDs, vinyl seems to magnify the true grit that albums are made of. Or, when an audiophile whined to John Peel about vinyl’s problem of “surface noise”, England’s most adventurous DJ nailed it in one: “Listen, mate, life is full of surface noise!”.

Of all the formats ever invented, the vinyl record has the biggest personality. It’s the artwork you’d proudly hang on your wall. It’s the warm sound of analogue. It’s the way that albums tell better stories when they’ve two sides. It’s the ritual of carefully sliding the record out of its sleeve and hooking up the needle, with its delicious crackle.
Even the core weakness of the vinyl record – its fragility – unconsciously arouses in music lovers a sense of preciousness, which we value and protect. For me, it’s the unmistakable perfume created by the sleeve and the vinyl. One whiff and I’m flashed back to childhood in the late 70s, discovering Electric Light Orchestra and Lene Lovich – a sensation I shamelessly call “undressing the muse”. I’d like to think I’m not alone in my sleeve-sniffing perversion, even though I know that for today’s young adults driving all this growth, nostalgia has nothing to do with it.

The world spins on its axis

As it turns out, there are rational reasons why such an old and supposedly obsolete format has risen from the dead. To begin with, vinyl was never completely extinct. Throughout the 1990s, vinyl became a club-oriented niche for working DJs – a market so small compared to the booming CD, most record companies paid little in royalties on the grounds that these 12″s were limited-edition promotional support. But specialist record stores never stopped stocking vinyl and even the large megastore chains, such as Tower and Virgin, operated small vinyl departments dedicated to underground genres.

“In the first years of the new century, illegal downloading created an existential crisis.”

Then, of course, in the first years of the new century, illegal downloading sent the CD industry tumbling into financial and existential crisis. Faced with extinction, struggling corner stores realised they had to react to this brave new world of screens and invisible, worthless music. To remain relevant, shops had to provide exclusives, in-store showcases, talks, album signings. With so many megastores closing, the smaller indie stores had to carry the torch as the last-standing beehives of the music business. Elaborate vinyl packaging was only one of many ideas explored in the terrifying depths of the record crash – but nowadays, if you ask any store owner or record label boss who’s survived to tell the tale, they’ll tell you: nobody saw this coming.

Everyone, however, agrees that the creation of Record Store Day, in 2007, provided the urgently needed platform to take their cause to the public. 10 years on and the facts speak for themselves. According to SoundScan, America’s music sales monitor, sales of vinyl during the week of Record Store Day have grown consistently from about 10,000 units in 2007 to almost 400,000 last year. For the 1,400 or so independent record stores still in business across America, that’s a 10-million-dollar festival during what used to be the most barren period of the year. Considering the vinyl record was an American invention, it’s no surprise they’re leading this revival. In the first decade of this century, closures were the norm – but since 2011, about 30 to 40 new independent stores have opened every year in the US.
Officially, 12 million vinyl records were sold in America throughout 2016. However, as Michael Kurtz, co-founder of Record Store Day, warns: “The numbers are all inaccurate. The vast majority of vinyl is still sold in indie stores and about 90 per cent of them do not report sales.” He points to Steve Sheldon, president of the Rainbo Records pressing plant in California, who admitted to the New Music Seminar in 2015 that his factory was producing roughly the same volumes of vinyl that SoundScan was posting for all of America. “And that’s just one factory!” gasps Kurtz. The real figures might be five times higher than what’s being announced in the media, especially if you include websites and what bands are selling directly to their fans.
In Britain, over three million vinyl albums were sold last year. That’s still just a five per cent slice of the national music market – all formats combined – but it’s growing by 50 per cent each year. Although Britain’s sales figures are more reliable than America’s, they are nonetheless misleading. For the 250 or so record shops across the UK, vinyl has been a crucial component of survival. The same applies to the indie labels, which sign and develop all the unknown acts that keep the music scene fresh.

the vinyl revolution
For the working class of the music business, not only does vinyl retail at £20, shops buy it upfront – unlike CDs, which are taken on sale-or-return consignment. So, although vinyl is expensive and complicated to press, selling small quantities to these tastemaker networks is far smarter business than the supposed simplicity and inexpense of uploading copyright to the likes of YouTube, where thousands of anonymous views generate pennies rather than pounds.

The price of freemium

To understand the true impact of vinyl, one needs to place it in the wider picture. The global music industry has shrunk from its $40 billion high point in 1999 to about $14 billion today. Vinyl is about five to six times smaller than the very biggest growth sector, subscription-based streaming. With its 50 million paying subscribers, Spotify is now the industry powerhouse, generating about $4 billion annually: a generous 80 per cent of which it distributes back to labels and artists in royalties.

“Publicising music in the digital age still relies on gigs, airplay, newspaper reviews and TV appearances”

In terms of audiences, however, YouTube is by far the biggest player on the field – clocking up five billion views each day. The problem is that YouTube’s ‘freemium’ model has paid only a total of $1 billion in royalties over 10 years, despite its owners, Google, raking in about $4 billion annually from YouTube advertising. Using congressional lobbyists to thwart attempts at regulation, YouTube claims it’s a promotional medium and should be paying only the small royalties that FM radio pays.

On the other side of the vinyl market, the Compact Disc is sailing into the sunset, but it hasn’t dropped off the horizon as people imagine. A whopping 47 million CDs were sold in Britain last year, generating £400 million – 47 per cent of the national market. In America, 141 million CDs were sold, about a third of their industry’s income.
Two countries in particular stand as notable holdouts; Japan and Germany. Not only was the CD a Sony invention that still arouses local sentimentality, Japan remains the reference among CD collectors all over the world. Immaculately printed on heavyweight tactile paper, complete with protective sleeves for the discs, the Japanese CD arguably pioneered the deluxe model that American and English indies have since adapted to vinyl. The CD still accounts for 70 per cent of the Japanese market – over a billion dollars annually. Meanwhile, Germany sells a little under one-billion-euros-worth of CDs every year, about two thirds of its market. It’s unlikely these two countries can hold back the digital tide indefinitely, but the point is: many millions of buyers still like the CD.

Hence the curious case of Amazon which, in 2015, overtook Apple’s iTunes Store to become the world’s biggest music retailer. Theories vary, but the most plausible explanation is that due to the closure of megastores, the decline of the iPod and the natural effects of ageing, the older end of the market is increasingly using the internet to browse for music and have their finds delivered to their doorsteps. This invisible and relatively wealthy market helps explain why the CD remains far bigger than people imagine, albeit in steady decline.
To put it mildly, the record business has never been as complex. As well as geographical diversity, there are about four generational layers – each with its own habits and contradictions. For example, subscription streaming accounts for 92 per cent of the Swedish market – the home of Spotify, whereas it accounts for just eight per cent in nearby Germany. In America, 80 per cent of youngsters use YouTube as their main source of music, whereas Spotify scores very poorly amongst teenagers everywhere. It remains to be seen if the Scandinavian model can conquer the world’s biggest market – America – let alone maintain its current growth rates as European teenagers grow up.
To work in such a confusing environment, all record labels, big and small, have had to become adaptable, multi-armed creatures. They must deal with everything from digital rights, vinyl, CDs and merchandise to third-party licensing, publishing and even artist management. The growth of Spotify and vinyl has certainly lifted spirits, but the music industry has become wary of fads.
As Napster, MySpace and iTunes have shown, the digital revolution has so far been a series of sandcastles and five-year tides.

The inherent problem with all digital platforms is they’re drab libraries, where visitors get lost easily if they don’t know what they’re looking for. The music business operates on hits – that is to say, tribal sensations that take our public spaces by storm. This is why publicising music in the digital age still relies on gigs, airplay, newspaper reviews and TV appearances – in other words, as much real-life action as possible to arouse curiosity and get people singing and dancing.
For the many who can’t afford advertising and have to fight their way in artistically, vinyl has become the sharp end of the cutting edge. The vinyl release has become the central showpiece, the event, from which CD and digital success will hopefully snowball. Just 500 pressings distributed into tastemaker networks can be the resounding statement that gets the word on the street.

A rough trade-off

Take Rough Trade’s impressive store in Brooklyn, where vinyl accounts for 75 per cent of sales. Admittedly, Rough Trade is seeing more of an even split between vinyl and CDs in its two London stores, but you get the picture. As for the bigger indie labels, whose business is bringing underground artists into the mainstream, Harry Martin of Domino Records explains how “the percentage of vinyl will naturally decrease as an album gets more successful, simply because the CD will start selling in supermarkets and Amazon, and people start listening online”.

A cursory glance at the UK charts proves his point. The new album by indie band The Moonlandingz entered the album chart at No. 92, having sold 600 CDs and 450 vinyl copies in its first week. It’s a stark contrast to the No. 1, Ed Sheeran’s Divide which, in its fourth week, sold 114,000 CDs and 1,600 vinyls. The Moonlandingz barely registered on digital, whereas Sheeran’s album clocked up 21,000 streams and 18,000 downloads. Curiously enough, Sheeran’s song Shape Of You topped the singles chart with half a million streams, despite there being no physical single. Hence why, when all the indies are mixed up with the corporate blockbusters, vinyl computes at only five per cent.

As Rough Trade’s store manager, Nigel House, puts it: “Vinyl is anti-establishment. Most under-30s listen to music on mobiles with bud earphones that make everything sound thin and tinny. I’m not sure this revival is driven by vinyl’s supposedly superior sound quality. It’s more that vinyl is so tactile and is the absolute antithesis of the digital world.”
Yes indeed, for twenty-something rebels, vinyl is a reaction to the age of throwaway pop that entertainment corporations have been churning out for 20 years. It’s no secret that in today’s post-crash music economy, the major corporations have learned to recoup their multi-million-dollar investments more from the spin-offs than from the actual recordings – which are mostly given away to kids via YouTube. Never before has pop been such a sugary hook to monetise brandnames and mass celebrity in other ways.

Ghost in the Shellac

The strangest aspect of this upheaval is that everything has happened before. Although the precursor to the vinyl LP was a 10″ 78 made from a harder black substance called Shellac, the laterally cut disc has been around since the 1890s. In the first two decades of the 20th century, the gramophone was a cultural explosion that launched stars such as Enrico Caruso and gave us imprints including His Master’s Voice and Columbia. Thanks mainly to the enthusiasm of women, the gramophone industry boomed spectacularly for two glorious decades, but with the unexpected arrival of radio in the 1920s – that is, free music on new technology – record sales began plummeting.

When the financial markets crashed in 1929, the declining record business became the worst hit of all Great Depression industries. By 1934, only six million records were sold in the US; a 95 per cent collapse in less than a decade.

“In its fourth week, Ed Sheeran’s Divide sold 114,000 CDs and 1,600 vinyl copies

Back then, as today, newspapers and banks assumed the record was obsolete. But what kept the bottomed-out business of the Great Depression alive were mail-order communities and die-hard specialist stores. English labels such as EMI and Decca were particularly adept at creating ‘clubs’ of music fanatics – a practice which pushed production into purist niches. This is why, despite appalling market conditions, the 1930s spawned some of the greatest blues, jazz, folk and experimental classical music ever recorded. Billie Holiday’s earliest classics sold less than 5,000 copies at the time. Robert Johnson’s cult recordings sold in the hundreds.

By the late 1930s, however, majors such as RCA, Columbia and EMI understood that the barrier to recovery was that most homes had only old or broken record players. And so they began targetting the next crop of teenagers, who never knew the gramophone boom of yore, nor were in awe of radio sets as teenagers had been in the 1920s. Simplified turntables were launched at around $7.50 – the equivalent of around £100 in today’s money. The logic was simple: if cash-strapped teenagers had new turntables, they’d start collecting records. In 1929, the founder of Decca, Sir Edward Lewis, used the analogy that you had to give away razors to sell blades.
After 15 years of crisis, today’s music business feels it’s been through the worst, but with worrying reports that half of all physical albums bought are never even opened, has anyone thought of targetting today’s kids with affordable players? Curiously, one of the success stories of today’s vinyl revival is Crosley, an independently owned manufacturer of retro-styled turntables. Although criticised by audiophiles as toy-like, their portable designs are based on the very turntables that helped bring the record business back to life in the 1940s. With some models retailing at around $150, Crosley’s biggest-selling model, the Cruiser, has sold a million units.

“There was always a market for the 60-year-old guy rediscovering his vinyl collection,” explains Scott Bingaman of Crosley’s chief distributor, Deer Park. “But the market changed dramatically around 2007, when lower-priced players came on offer at Target and other stores. Since then, it’s been mostly growth.” About $2 million worth of Crosley turntables are sold every year in American record stores, and they’re now being stocked in fashion chains such as Urban Outfitters.
As the wave starts to creep into the mainstream, the big worry among record shop owners is that vinyl, crucial as it’s been to their own survival, might be becoming another ‘lifestyle’ fad. But as Bingaman rightly concludes: “The average indie-store owner doesn’t see the bigger picture. They only see the already-converted in their stores. Most people on the street still have no idea that vinyl has come back to the degree it has. So, getting kids who shop at Urban Outfitters, Target and Tesco to buy our turntables is making the overall vinyl pie bigger. To see how fashionable vinyl is becoming, just look at the Crosley hashtags on Instagram. So many people today regard vinyl as a part of who they are.”

“Radio and records came to coexist – why wouldn’t digital and physical music evolve along similar lines now?”

Ultimately, the true test of the vinyl revolution is whether labels, manufacturers and retailers can take the culture of £20 objects beyond the confines of indie stores, and convert the next generation of teenagers, who grew up in the Great Recession and didn’t experience the internet revolution as those born in the booming 1990s did. If history keeps repeating itself, I fear this question will not be decided by simple trends in fashion or technology. World War II changed everything, including the way music was heard and felt. Seeds of recovery were sown in the Great Depression by diehards and connoisseurs, but it was the heartbreak of world events, especially profound among women, which resurrected record-buying to levels not seen in a generation.
And so, radio and records, once rivals, came to coexist in mutual dependence for decades thereafter. Why wouldn’t digital and physical music evolve along similar lines now? One is a browsing tool for keeping up to date, the other is the original artifact to keep through life.
As the word ‘revolution’ suggests, the world is like a record spinning round in generational cycles. Chances are, today’s vinyl rebels will be the ones to influence the habits of the current 13-year-olds coming up. After, all trends spread downwards from schoolyard leaders and older brothers and sisters (we should remember that all record booms – Caruso, blues, wartime serenades, Beatlemania, disco – were driven by women).

Some of us old enough to have lived through the evolution from vinyl to CD perhaps can’t relate to today’s vinyl revival, nor believe it will last. But considering how the wider world has moved over the last five years, who can say with any certainty how the next decade will unfold?
Come what may, we must acknowledge that vinyl is fuelling a reaction against the scourge of bubblegum pop, while enabling the working class of music to survive and create opportunity.
Nobody can control the tastes of teenagers – but I can’t help feeling that we should, at the very least, be helping youngsters to buy their own turntables and adopt the ritual. Ultimately, it’s a question of substance. 130 years of recorded music has proved that, when humanity needs a lift, nothing opens eyes and ears quite like the big, beautiful vinyl masterpiece.