Vinyl record boom may go bust following devastating California fire
Vinyl records were projected to break through $1 billion in sales for the first time in 40 years
FOX Business' Robert Gray reports on how vinyl record sales are growing rapidly, almost more than CDs.
The music industry may have to scratch the recent dynamic resurgence in sales of vinyl records following a devastating fire at a leading industry supplier.
Last week Apollo Masters -- one of two companies in the world that supplies the lacquer used for making master discs, which are used to make vinyl records -- saw a blaze destroy a significant portion of its plant. It's rival, Japan-based MDC, is seen as a smaller company that could be challenged to fill the void.
Gil Tamazyan, president of the California-based record vinyl pressing plant Capsule Labs, told Billboard that the fire could cause a hindrance in a “major way,” because he estimates Apollo supplies around 80 percent of blank lacquer master discs globally.
While noting that the vinyl industry is “resilient,” David Read, a vinyl production and sales coordinator at Toronto-based music company Duplication, did admit the fire “will directly affect all vinyl plants, bands/labels, mastering engineers, plating facilities etc."
Apollo's website does not offer much consolation: “We are uncertain of our future and are evaluating options as we work through this difficult time.”
The impact of the fire could not come at a worse time. Sales of good old fashioned "hot wax" that require a turntable and a "needle" to play music have been climbing steadily for the past few years and in 2020 global sales of vinyl records are projected to break through $1 billion in sales for the first time in 40 years.
Vinyl Me, Please CEO and co-founder Matt Fielder and co-founder Tyler Barstow on the success of their record company and the revival of Vinyl.
INTEL STOCK JUMPS TO HIGHEST PRICE SINCE DOT-COM BUBBLE
According to a recent survey, although streaming apps have become the most common form of listening to music, some 46 percent of all Americans say they like to buy physical copies (vinyls or CDs) of their music and 31 percent say prefer vinyl.
Even millennials, who get blamed for just about everything, are jumping on the vinyl bandwagon. The survey reported that 28 percent of millennials are buying records compared to the expected audience, Baby Boomers at 36 percent.
WHY HARD ROCK HOTEL IN LAS VEGAS IS SELLING ITS FURNITURE
Its steady sales surge can point to that. Despite the modernization of CDs, a 2019 Recording Industry Association of America’s report shows vinyl records earned about $224 million on 8.6 million unit sales in the first half of the year, just shy of $248 million in sales for 18.6 million CDs. Vinyl revenue grew nearly 13 percent in the second half of 2018 and in the first half of 2019, while the revenue from CDs stayed mostly static.
CLICK HERE TO GET FOX BUSINESS ON THE GO
Despite the growth of vinyl with more and more artists making the switch, records accounted for only 4 percent of total revenues in the first half of 2019, according to Rolling Stone.