As vinyl continues to capture the hearts and wallets of consumers, attracting new audiences and creating a fresh niche, Alexandre Jornod, a senior market analyst with Futuresource Consulting, explores the current landscape and opens a window on what to expect.
The global vinyl market posted exceptional results in 2021, with volume and value both climbing to heights that we’ve not seen in recent years. The wave of momentum began at the start of the pandemic, with lockdown measures and social distancing prompting people to explore new hobbies and pastimes that centre around the home. And with releases from the likes of Adele, Abba and Ed Sheeran during Q4 2021, even more upward pressure was applied to the market.
Our research shows annual volume grew by 27%, culminating in 91.5 million albums shipped during 2021. Yet this already impressive figure was overshadowed by value, which jumped 46%, to end the year at $2.7 billion. Crucially, the rise in value is linked to vinyl’s average retail price jumping 15% compared to 2020, notably due to rising production costs.
We’re seeing a virtuous circle begin to emerge, with the renewed interest in vinyl inspiring more artists to release on vinyl. Not only is this recognised as a lucrative revenue stream, it’s also regarded as a way to increase engagement with fans. And as more artists release on vinyl, an even wider audience is engaging with the format. Notably, younger demographics are starting to buy vinyl as a collectable item, with artists like Billie Eilish and Olivia Rodrigo helping to drive the adoption through into Gen Z.
The market has certainly benefited from an influx of new vinyl buyers, who have been building record collections from scratch and driving sales for both new and catalogue releases. In addition, this vinyl resurgence has been pushing forward at a time when streaming subscriptions have also experienced strong growth. This suggests that vinyl could become a ‘forever format’, co-existing alongside streaming services for the long term. The physical format benefits from a combination of tangibility, collectability and artist engagement, which is likely to cement its position within the hearts of buyers for many years to come. Vinyl is poised to provide a significant ongoing revenue stream for the wider music industry and artists.
Many consumers also see vinyl as a collectable item and a way to engage and support their favourite artists. This sense of ownership and artist support has meant that some music enthusiasts have bought vinyl without having a turntable to play it on. However, this situation is beginning to change.
Turntable manufacturers have facilitated hardware adoption by releasing more turntables at a lower price point, directly targeting this new vinyl audience. Some models also integrate Bluetooth functionality to connect the turntable to a wireless speaker. At the same time, audio brands are launching more wireless speakers that are geared towards being used with a turntable.
As we move through 2022, the cost-of-living crisis is anticipated to impact the market, notably as consumers are expected to buy less vinyl than they did in the past 2 years. Nevertheless, we still anticipate to see volume and value growth in 2022 thanks to a larger pool of consumers engaging with the format.
Supply chain challenges have also heavily disrupted the market and these are set to continue across 2022 and potentially into 2023. There’s inflation-related market uncertainty, coupled with supply chain issues, which are set to get even worse due to the conflict in Ukraine, as Russia is a key supplier of nickel, gas and petroleum products into Europe. This is anticipated to further increase the average retail price of a vinyl in the next few years.
Longer-term, we expect the market to begin to stabilise, with the recent double-digit levels of growth starting to subside a little, but still maintaining healthy levels as more consumers discover and engage with vinyl.
Looking out across our forecast period to 2026, we anticipate the vinyl market to achieve annual revenues of more than $5 billion. This is due to the wider appeal among all age groups, but also the important rise of the average price of a vinyl, which is set to be $10 more expensive in 2026 than in 2020.
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