Dust Off the Vinyl

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Published August 10, 2012

| FOXBusiness

Vinyl records have gotten their groove back.  

The 12-inch discs were left for dead a quarter century ago, but they are once again a hot physical commodity in this digital download world. Over the past few years, more Americans have been dusting off the vinyl and putting the needle on the record.   

“They are coming back to the vinyl again because they find vinyl is more fun, and they enjoy the experience,” asserts Joseph GaNun, owner of New York City’s Academy Records, a music shop selling albums on both vinyl and CD.

GaNun says the vinyl experience is much more active than turning on a digital stream, which he reckons is easier to tune out. 

"When you listen to vinyl you kind of have to handle it in a certain way,” he explains while carefully placing a vintage vinyl album on the turntable. “You have to be careful in how you handle it, and in taking it out of the jacket you want to make sure you don't scratch it. And when you put it on you are saying to yourself, 'I want to listen to this record.'"

The vinyl records renaissance is not just anecdotal. U.S. vinyl album sales reached 3.9 million units in 2011, according to Nielsen SoundScan -- that’s nearly a 40% gain over the prior year, and the most vinyl sales registered in the two decades the company has been collecting the data.  
Still, it is well below the vinyl sales peak back in the disco era.  

The Recording Industry Association of America reports a record 344 million LPs and EPs were sold in 1977 -- the centennial celebration of Thomas Edison’s invention of the phonograph. The recordings had tracked from “Mary had a little lamb” to the “Saturday Night Fever” double album soundtrack, and the ubiquitous platters were spinning in every club and virtually every home.  

But consumers soon jumped to more portable, and purportedly durable, formats and the new technologies quickly outsold and displaced vinyl: first cassettes, then compact discs, and most recently, digital downloads.

Despite displacement by these upstart formats, the vinyl record renaissance is still rocking. SoundScan reports vinyl album sales through June tracking 14% ahead of the same period last year.

The labels are responding to the increased demand, although they say it is not a profit motive driving the decision to press more platters.  

“We have increased the number of vinyl releases, but it’s very expensive,” says Christina Rentz, publicist at noted indie music label Merge Records in Durham, NC. “The packaging is more expensive, to make the lacquer, artwork, and packaging it can make a budget look rough. We charge more for the LP than the CD. You have to charge more, though the margin is thin.”  

Despite the higher costs, more artists are pressing albums as well as special edition releases on vinyl. Surprisingly, this movement is not only being led by revival acts and nostalgic rockers. “Younger artists are just as, or even more, excited about having their albums on vinyl than the older ones!” proclaims Rentz.

The increased demand has been a boon for the business of making records. Fern Vernon-Bernich runs vinyl record pressing plant Brooklyn Phono with her husband, Tom. Since opening in 2002, the couple says they’ve seen interest in vinyl records, and demand for their services, grow faster than they ever imagined as the movement has gone mainstream. 

"Everyone is pressing vinyl, before you had a very niche group of labels that would come to us that had been doing it for a while and now everyone wants to make a record."

Brooklyn Phono pressed some 400,000 records in 2011, a far cry from their humble beginnings in the plant’s industrial Brooklyn neighborhood. The couple started with two outdated machines and a passion for the business. In true D-I-Y fashion, Tom rebuilt the pressing machines himself before adding three more — including one he fashioned just for 7-inch singles.

Bernich says the sweat equity has paid off, “I love being part of the creative process.”  And he jokes that now the only thing keeping a lid on expanding production is a meticulous attention to detail.

"The volume is subject to our quality, so if we have bad material everything comes to a grinding halt. Right now we have wonderful material and we’re going gang-busters.”

Business has doubled in each year since Brooklyn Phono cranked up their vinyl-pressing machines, as demand has grown globally.   

“We ship to every state, I think the only state we haven't shipped to yet is Hawaii, it's amazing,” explains Vernon-Bernich. And she says the vinyl record revolution is not only taking place on American turntables. "We ship our records everywhere,” she explains, citing clients stretching from China to the UK and South America.

While hipsters and hippies alike enjoy the warm, fuzzy sounds of vinyl, the industry has worked out a simple solution supporting the format while taking the jukebox with you. Vernon-Bernich, the business and marketing maven of Brooklyn Phono, explains, "Inside the record you can put a download card, where when the person purchases the record, not only do they have this wonderful piece of history and art, they also can put it on their iPhone and walk around and listen to it."

Higher LP sales may be boosting business for record plants, but it’s unclear if the vinyl resurgence will help preserve the endangered public face of the music industry — the record shop.

Independent music stores have banded together to create National Record Store Day.  The five year old holiday is an attempt to drive consumers into music shops to buy special editions on vinyl and spend more on physical music formats in-store instead of buying them online or downloading tracks.

National chains including Best Buy (BBY) and Urban Outfitters (URBN) have also jumped on the bandwagon, selling albums and record players.  

"It's definitely not hurting, but in terms of long term, I don't know what will be the future,” says GaNun, who has owned Academy Records in Manhattan since 1998. But the music man is bullish that vinyl, like rock and roll, is here to stay:  “As good as a download can be it is not going to replace the physical object, which is part of the whole experience of vinyl."

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