The vinyl business, a whim that moves millions

Compared to twenty years ago, vinyl is selling like hotcakes. They are still a very small part of the record market, as streaming is still the source of 84% of the American record industry’s revenue (86% in Spain, where, by the way, CDs are still bought more than vinyl), but the steady increase of vinyl has revived an industry that seemed destined for scrap.

The recovery is slow. When the format fell out of use, so many vinyl factories closed that there weren’t enough to meet the growing demand, and bottlenecks arise from time to time, disrupting the flow to stores. Sometimes because of a single artist, as in the case of Adele and the release of her latest album.

The British singer ordered so many copies of “30” on vinyl that European production was cornered and many small artists had their requests for production turned down for months. Her company, Sony, acknowledged that it had to pull other titles from its catalog from printers abroad to ensure Adele’s records hit shelves for the juicy holiday season, and the situation even affected Ed Sheeran movie stars, who complained that his was Compatriot monopolizes production: “There are about three vinyl factories in the world so you have to get far ahead and Adele had booked practically all the factories so we had to force a fit and try to get our record in there. Me, Coldplay, Adele, Taylor Swift, ABBA, Elton John, we were all trying to make our vinyl at the same time.”

Adele sold more than half a million copies, but the move hasn’t gone as well as she’d hoped, with entire batches of vinyl from the record reportedly selling at bargain prices due to overproduction.

To avoid the same thing and be able to optimize their vinyl releases, the band Metallica, one of the most successful of the format, decided to buy a factory by acquiring a majority stake in Furnace Records, a Virginia-based vinyl pressing plant that has been around for over a decade works for her. The Californian group didn’t buy it for themselves, as they say they intend to help other artists and record labels make their vinyls. And it has also subcontracted to Pallas, a German pressing plant that excels at using high-quality materials in the production of high-quality records, to ensure the supply of raw material at a particularly sensitive moment due to international tensions. Another rock star, Jack White, who opened his own vinyl factory Third Man Records in 2001, gave them a “welcome to the cause,” and Metallica thanked him for being a “pioneer.”

But let’s come to what touches us very much. How is the situation in Spain? Is it an interesting business to invest in?

“The demand for vinyl continues to grow, both new releases and reissues, and we have had several moments when we have given nothing more than ourselves,” says Eugenio López, who, together with several partners including the legendary sport, created the Mad Vinyl factory in Madrid founded commentator Michael Robinson, who was also a die-hard music lover but died before the project began. «On the one hand, at the end of 2021 we suffered from a severe shortage of many raw materials related to vinyl, such as the plastic itself, the cardboard for the cases and the inks, which caused us several moments of congestion. Having returned to a slightly more normal situation we have expanded machinery and staff to meet all the demand and we are currently the factory in Europe delivering the discs in less time compared to an average of eight weeks we can get to market the six months that still exist in Holland and Germany have finished. It’s a pretty reasonable amount of time.”

But the most interesting thing about this phenomenon is that it’s by no means exclusive to Adeles, Metallicas, and Coldplays. As López points out, “More and more groups are releasing their album on vinyl to go on tour and the most interesting thing is that they ask us for a reissue very quickly since it becomes part of their merchandising and financing method”.

Diego Arroyo from the band Veintiuno confirms the latter, albeit with an important nuance: “What the artist earns from the vinyl depends on which record deal he has and who ultimately benefits from the sale of the vinyl. If the artist is in control of their own master and handles the vinyl themselves and only pays the manufacturing cost, the answer is yes, it’s a money-making helper. What leaves no room for discussion is that “where the most records are sold today is definitely always on tour,” adds Diego. “For example, we buy our vinyl from our own record company at a lower price than the market, so we have a certain profit margin when selling it at concerts.”

Luis Fernández, director of the Sonido Muchacho label, which carries bands such as Carolina Durante, Natalia Lacunza, Cupido, La Bien Querida, Los Punsetes or Hinds, adds another nuance: “I wouldn’t consider vinyl records as simple merchandising. It detracts from the physical product of the record, which is the foundation of every tour.” For this independent circuit entrepreneur, “vinyl is absolutely necessary to give projects continuity and make them make conceptual sense.” In his experience, “it’s a fundamental Format that also goes on tour”, and in terms of financing “another complement, just as necessary as other merchandising objects such as t-shirts”.

Fernández is clearly committed to a promising future for this market. “Vinyl will stay. I like it, it’s good, beautiful, with an implication of desire more than the CD, and it will always be there. For indie artists, but also for the mainstream. For all”.