A stack of freshly pressed gold vinyl records at United Record Pressing.
CNBC
This story is an element of CNBC’s recent quarterly Cities of Success series, which explores cities which have been transformed into business hubs with an entrepreneurial spirit that has attracted capital, firms and employees.
Once considered a dying industry, the vinyl record business has undergone a remarkable multibillion-dollar resurgence up to now decade. It has been fueled by popular artists equivalent to Taylor Swift and major retailers including Goal and Walmart, together with a growing wave of consumers rekindling their love for the nostalgic format through the Covid pandemic.
“Never in 1,000,000 years did I believe it could, as a market and as an industry, change into what it’s change into today,” Mark Michaels, CEO and chairman of United Record Pressing, the biggest vinyl recording pressing plant in North America, told CNBC’s Andrea Day within the upcoming primetime special “Cities of Success,” which airs Dec. 6 at 10 p.m. ET.
United Record Pressing CEO Mark Michaels inspecting a vinyl record.
CNBC
The worldwide vinyl record market was valued at $1.98 billion in 2022 and is projected to succeed in $4.12 billion by 2030, in keeping with Verified Market Research. Greater than 41 million vinyl albums were sold within the U.S. last 12 months — the very best number since 1988, in keeping with the Recording Industry Association of America.
United Record Pressing has change into a significant player within the vinyl market, producing roughly 40,000 records each day at its Nashville, Tennessee, facility. Founded in 1949 as Southern Plastics, the corporate has a wealthy history of manufacturing vinyl records for iconic artists, including The Beatles, Stevie Wonder, Michael Jackson, Adele and Jack White.
But the corporate was facing an uncertain future 16 years ago when Michaels acquired it.
Second wind
The vinyl record industry had been in decline for several a long time because of the emergence of more convenient physical formats equivalent to cassette tapes and CDs, a decrease in the standard of vinyl records because of lower-quality materials and processes, and the rise of digital music, equivalent to MP3s and online streaming.
Vinyl record sales plummeted within the Eighties and Nineties. And by the early 2000s, the industry was on the verge of extinction: In 2006, only one million vinyl records were sold within the U.S., in keeping with RIAA.
“I questioned what I did on a regular basis,” Michaels recounted after acquiring the corporate. “I had many sleepless nights. [Even] my family questioned what I had done.”
But within the years that followed, Michaels said, he noticed a promising trend: Indie artists displayed a growing interest in vinyl.
Hoping to position United Record Pressing because the go-to pressing plant for those artists and music producers who valued the tangible vinyl experience, Michaels purchased old record presses from closed plants to accommodate potential growth.
“Prior to 2016, you needed to have the option to search out and restore an old record press, and that was an actual tough, tough search,” Michaels said.
The demand for vinyl from each indie and mainstream artists soon led to reissues and coloured variants, marking a turning point, in keeping with Michaels. That growth gained further momentum with the entry of major retailers equivalent to Goal and Walmart into the vinyl market within the early 2010s.
Mainstream lift
When Goal and Walmart, two of the biggest retailers in North America, decided to stock vinyl the whole supply chain was significantly affected, in keeping with Michaels.
Vinyl began reaching a wider market segment: consumers who may not have traditionally shopped in independent record stores but were keen on acquiring mainstream vinyl titles.
“We recognized that with all of the old presses that we had acquired, and we built the corporate around, that was inadequate to have the option to service the needs of where the market was going,” Michaels said. “Conveniently, in type of 2016, a few firms began manufacturing recent record presses.”
Read more about Nashville and CNBC’s Cities of Success
Soon after, United Record Pressing implemented a growth strategy, relocating to a bigger facility in 2017. The corporate established a creative marketing team that engaged with artists and labels, conceptualizing unique vinyl ideas equivalent to liquid-filled, split-colored and scented records.
The corporate also included a digital download coupon with each record and initiated a record label, recording artists on tape and pressing on to vinyl.
Michaels said the corporate also orchestrated a grassroots public relations campaign to spotlight its 60-year history because the premier vinyl pressing plant in North America.
United Record Pressing’s expansion space.
CNBC
The brand new space, spanning 155,000 square feet in Nashville, not only met present requirements but additionally positioned the corporate for future growth — which might come just a number of years later when the Covid pandemic provided a further boost to the industry as people reengaged with the nostalgic format.
Today, the medium reigns as the most well-liked physical music format within the U.S., representing 72% of all physical music sales, ahead of CDs and cassettes, in keeping with mid-2023 data — essentially the most recent information available from the RIAA.
In accordance with Billboard, the common price of a vinyl record increased from $26.12 in 2021 to $29.65 in 2022, reflecting heightened production costs and the impact of inflation.
As well as, the landscape of vinyl retailers has evolved over time. Indie record stores led the market in 2015 with 45.4% of sales, Billboard reported, followed by web or mail-order sellers equivalent to Amazon at 32.9%, and chain stores equivalent to Best Buy at 15%.
By 2018, Amazon had eaten into indie stores’ dominance, with each categories representing 41% of market share, while Best Buy’s share had decreased to only over 10%. And by 2019, major retailers equivalent to Walmart and Goal were registering on the scene.
Where big-box retailers made up only one% of vinyl record market share in 2015, they accounted for 14.6% of sales in 2021, in keeping with Billboard.
Artist-driven
Michaels told CNBC he’s confident that the market’s continued growth shall be artist-driven. That plus a general shift in interest, as younger listeners discover vinyl, suggest the medium is here to remain, he said.
Artists equivalent to Taylor Swift offer collectible versions of their albums, called “variants,” that are multicolored vinyl records.
Most of recording artist Taylor Swift’s catalog, including her album “Red,” has been pressed at United Record Pressing.
CNBC
“When Taylor releases a recent record, there could also be eight, nine, 10, different variants of that very same record — different colours, different mixtures, perhaps there’s some unique tracks that weren’t included on the digital release, or the CD, but you get it on the vinyl,” Michaels explained. “There’s a whole lot of fans that say, ‘There are eight different variants. I need one among each, please.’ They’re very supportive.”
The CEO attributes a portion of his company’s success to the town of Nashville, too, praising its deep-rooted connection to music and the creative industry, which has provided a dedicated and expert workforce.
“You may have the entire musical ecosystem here,” he said. “You may have artists, producers, studios — all of it works together in a highly symbiotic way. It’s the proper place, and we’re very fortunate to be here.”
TUNE IN:Â The “Cities of Success” special featuring Nashville will air on CNBC on Dec. 6 at 10 p.m. ET/PT.
Correction: A photograph caption on this story has been updated to correct that almost all of Taylor Swift’s catalog has been pressed at United Record Pressing.
