The global vinyl market made tremendous gains in 2021, achieving 46% value growth to reach $2.7 billion, according to a new market report from Futuresource Consulting.
“Value is up, shipments are sailing skywards, and the vinyl market is experiencing significant levels of growth, despite important supply issues” says Alexandre Jornod, Senior Market Analyst, Futuresource Consulting. “We’re riding on a wave of momentum that began at the start of the pandemic, but that’s been buoyed by some very strong releases in Q4 2021 from the likes of Adele, Abba and Ed Sheeran.
“Revenue is currently outstripping volume, which grew 27% last year to achieve 91.5 million LPs shipped. That’s a result of strong demand elasticity, but also due to significant increases in production costs and difficulty to produce enough vinyl to meet the strong demand, which combined to push the average retail price up by 15% compared to 2020.”
Fast forward to 2022, and Futuresource expects another strong performance, with a continuing demand for vinyl throughout the year. However, supply chain challenges have heavily disrupted the market in 2021. These are set to continue across 2022 and potentially into 2023, with inflationary and supply issues expected to escalate, notably due to the conflict in Ukraine, as Russia is a key supplier of nickel, gas and petrol to Europe.
Production capacities have increased and Futuresource expects further investments to take place in the next few months. However, the bottleneck is now shifting to the production of stampers, which have been under heavy pressure as artists and labels are ordering more vinyl, but in smaller runs, which requires the production of more stampers and test pressings.
“Moving forward, we’re going to see the market stabilise, but still maintain healthy levels of growth,” says Jornod. “More consumers are now engaging with vinyl and buying turntables as well. Previously, some people would buy records just for their collectability, without being able to play them. This situation is being eased from two directions. Turntable manufacturers are producing more accessible and easy-to-connect turntables, and audio brands are also launching more wireless speakers that can be used with a turntable.
“By 2026, we expect the vinyl market to achieve revenues of more than $5 billion as a result of the wider appeal amongst all age groups, along with rising retail prices, as the average price of vinyl is forecast to be $10 more expensive in 2026 than it was in 2020.”
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