Back to the future: Vinyl record sales double in '08, CDs down

What's old is new again when it comes to audio storage

Audiophiles have long argued that vinyl records offer better sound quality than CDs or MP3s, but their stoic loyalty in the face of change was seen as little more than a nostalgic bias during the 25 years in which digital recordings came to dominate the music industry. In recent years, however, sales of LPs -- that's short for long-playing records, kids -- have more than doubled online and are regaining overall market share, thanks to new converts looking for more than they can find in an MP3 selling for 99 cents online.

In 2008, 1.88 million vinyl albums were purchased, more than in any other year since Nielsen SoundScan began tracking LP sales in 1991. The previous record was in 2000, when 1.5 million LP albums were sold. More than two out of every three vinyl albums bought in 2008 were purchased at an independent music store, according to SoundScan.

Vinyl record sales rose 14% between 2006 and 2007, from 858,000 to 990,000. In contrast, CD sales plummeted over the past three years, from 553.4 million in 2006 to 360.6 million in 2008. MP3 sales grew from 32.6 million to 65.8 million during the same time period, according to SoundScan.

Newbury Comics store manager Dan Phipps said his store's  expanded vinyl record section is geared toward younger buyers drawn to the aesthetic value of a an LP
Newbury Comics' store manager Dan Phipps holds a vinyl copy of Beck's Modern Guilt .

Industry observers say vinyl record sales have skyrocketed because new buyers are discovering the value of owning albums, with their cover art, large liner notes and warm sound.

"There's nothing like a vinyl record. It's analog. It sounds as close as you're going to get to the artist. If you're that guy who sits in that optimum space in your living room, you're definitely going to hear the difference," said Steven Sheldon, president of Los Angeles-based Rainbo Records.

"Now, with that said, 99% of the public listens to music as a background off of iPods and everything else," he said. "That's by far the worst sound quality, but it's also the most convenient -- and convenience sells."

Rainbo Records, which has been pressing vinyl LPs since 1955, doubled its production from 2006 to 2007 and more than doubled record output this past year. The company currently presses 25,000 albums a day; that's up from a low of about 6,000 to 8,000 a day in the late 1980s through the late 1990s, when CDs were in their heyday. Since then, there's been a steady increase in vinyl production. Surprisingly, Sheldon doesn't attribute that rise to Gen Xers or even baby boomers, but to 13-to-24-year-olds rediscovering the aesthetic value of record collections.

"They were brought up on virtual everything. Their games were on the computer or on the TV. Their music was in a box," he said. "I think they also do recognize the difference in sound, but I think holding that 12-by-12 piece of art and holding that record in their hand is creating the buzz."

While you might think Sheldon has an ax to grind against modern forms of music recording, he doesn't. His company also produces CDs -- to the tune of 75,000 a day.

Over the past 30 years, the number of companies manufacturing LPs has dwindled, Sheldon said. But production remained relatively steady for those companies that remained in business, kept afloat by the aficionados who swear by vinyl's sound quality.

Josh Bizar, sales director at Chicago-based Music Direct Inc., an online supplier of turntables, needles and record cleaners, said Nielson is likely under-reporting record sales because many online and independent retail shops aren't counted.

Music Direct opened 20 years ago, as the CD market exploded, targeting sophisticated audiophiles, Bizar said. In each of the past five years, it has seen a 200% increase in LP sales and now ships between two million and three million vinyl albums annually.

LPs have made enough of a comeback that online retail sites such as have recently created pages dedicated to the sales of vinyl records.

Doylestown, Pa.-based SoundStage Direct LLC, which operates an online vinyl record store, experienced a 49% increase in sales from 2007 to 2008, selling 55,000 LPs over the past year, according to owner Seth Frank. Frank, 42, said he first worked in a record store at age 10. After college, he said, he took a "suit" job, but hated it. So five years ago, he decided to go back to his first love, selling records.

"Records just sound better. They have that warmth to them -- that analog-warm sound. A record reproduces music, a CD transforms it into zeros and ones," Frank said. "Digital to me is a harsher sound. When I put a CD on, it's the soundtrack of the day. It's background music. When I want to listen to music, I listen to a record."

According to Frank, the music industry is responding vigorously to increased demand for vinyl, and labels representing artists such as Nirvana, Van Morrison, Cream, Guns 'N' Roses and Metallica have all recently put out new releases or re-released classic albums on new vinyl.

"Motley Crue just released all their albums in vinyl, and I can't keep them on the shelves," Frank said. "Some artists who want to promote vinyl are also putting their extra tracks on them instead of CDs."

Duncan Browne, chief operating officer at Brighton, Mass.-based Newbury Comics, a brick-and-mortar retail chain with 28 stores in five states, said his company has expanded shelf space for vinyl records over the past year in order to accommodate a more than 35% increase to date in vinyl sales to "younger people".

"I think it's a novelty thing, by and large. I think it's a faddish thing," he said. "It seems like something cool. It's a differentiator and it also gets into the DJ culture."

Browne said he doesn't expect the uptick in record sales to continue, but it will leave behind a new, younger audience of audiophiles, similar to the stalwarts who never gave up on the medium during the rise of CDs and MP3s.

Dan Phipps, manager of the Newbury Comics store in Natick, Mass., said most of his customers who buy vinyl are teenagers dissatisfied with purchasing music online. They want the artwork that comes with an album cover as well as large liner notes and other extras.

He said the biggest genres of music he sells are classic rock, pop or new hip-hop albums.

It's not just the vinyl that's selling. Phipps pointed to a large stack of boxes containing turntables that have been upgraded with USB ports that can be used to transfer LP music to digital media. Today's turntables are a pricier, however, than they used to be. A Thoren's turntable can run as much as $6,200. And some models from Clearaudio run as high as $150,000. But take heart, a simple Sony, Panasonic or Stanton turntable can still go for a little more than $100.

According to Music Direct's Bizar, a decent player should now cost about $350. For that, you'll have a turntable for life, he said.

Audiophiles who haven't listened to an LP lately will likely find that the quality of sound on today's albums surpasses that of the old-school vinyl of the 20th century, according to Bizar and others.

In the 1980s, companies pressed vinyl into records weighing 120 grams. Today, records are thicker, weighing in at 180 grams -- and they're recorded with more-sophisticated electronic equipment, Bizar said.

"Look. It would take me two minutes to play you a CD on a $3,000 CD player and then play the same music using vinyl on $500 turntable, and you will choose the vinyl every time," he said. "I'm not an audiophile, but 100% of time, I choose vinyl."

Copyright © 2009 IDG Communications, Inc.

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