Vinyl continues to excite consumers and capture an increasing share of wallet, as the long-standing music format underwent another rally last year, achieving 23% retail value growth according to Futuresource Consulting.
The market research firm’s recently released market outlook report, alongside Lead Market Analyst Alexandre Jornod’s presentation at their Audio Collaborative event last week, both point to a rosy future for the sector.
“After a rush of activity between 2013 and 2019, the vinyl market began to cool down,” says Jornod, Lead Market Analyst at Futuresource Consulting. “Fast forward to 2020 and the pandemic changed vinyl’s trajectory once more. Lockdowns accelerated consumer demand, as music lovers craved ownership of new records. Their disposable income increased, too, and they couldn’t spend it on out-of-home leisure activities.
“What’s more, artists felt the pinch of cancelled touring schedules. As a result, many turned to vinyl as a key income stream. This year, artists like Billie Eilish and Olivia Rodrigo, particularly successful among Gen Z, have released new albums on vinyl. This is driving additional demand among younger demographics, many of whom are first-time vinyl buyers.”
The USA, UK, Germany and France lead the way in volume terms, due to their long histories of consumer interest in vinyl, alongside established retail networks. Yet markets which have been slower to re-engage with vinyl, such as Italy and Spain, are now seeing a significant increase. In particular, Futuresource expects vinyl consumer spend in Spain to grow by 41% in 2021. Japan, Canada, Australia and the Netherlands are also all expected to see strong growth levels in 2021. Futuresource even expects vinyl to overtake CD in value terms in many markets this year, including the USA and UK.
According to the latest Futuresource Living with Digital consumer research study, published in July this year, vinyl and music streaming formats are converging. The study found that 68% of vinyl buyers also listen to music on streaming services, whereas streaming subscribers are also more likely to make vinyl purchases when compared with the average consumer.
“But it’s not all paradise and profit for the sector,” says Jornod. “With the groundswell of artists and labels keen to release more music, and the explosion in consumer activity, global production is unable to satisfy current demand.
“Raw material and labour shortages are also creating challenges within the supply chain. A combination of pandemic-related factors, bad weather at some oil extraction sites, along with a generalised increase in demand for plastics are causing the industry some headaches. However, the capacity of most pressing plants has already increased in 2021 and we expect this to continue into 2022, adding much-needed market capacity.”
Moving forward, Futuresource expects consumer spend on vinyl to rise by 34% In 2021, achieving $2.2 billion and maintaining healthy levels across 2022. By 2025, consumer spend on vinyl is anticipated to reach $3.5 billion, double the value recorded in 2020.
In addition, Futuresource’s well-renowned Audio Collaborative event is now available to view on demand here, with sessions exploring the music industry in more detail, alongside a fireside chat on ‘Vinyl Revival’ with Optimal Media and Sony Music Entertainment.
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