The Future is Vinyl?
Everyone knows that of all the audio formats in the Music Industry it is vinyl that is increasing sales the fastest, albeit from a small base.
Traditionally vinyl buyers have been those discerning music fans who really care about sound and presentation but that is changing. With the advent of ebay allowing everyone easy access to a shop window on the world there has been a tendency for many of these fans to but an extra copy of an album which they later will sell. The profit generated from this sale was used to offset their original purchase.
However, recently this has changed. With the increase in the price of oil the cost of manufacturing vinyl has increased dramatically too. For example, one major label in the US has been withdrawing many of its current titles from its catalogue and repressing at a much higher dealer price, in some instance almost 100% increase. Unlike the 80’s oil shortage when the Companies kept costs down by issuing wafer thin albums, today with the fans demand for high quality 180gram vinyl albums this is not an option. This has changed the market place dramatically. Vinyl buyers now also include many speculators who in my experience have in some cases bought as many as 30 units on a particular title.
Is vinyl a good investment?
The oil price is set to rise further and many market analysis are predicting at least another 30% increase in the price of a barrel of crude by the end of the year. Oil is black gold and the implications are obvious. Vinyl prices are set to rocket too. Speculators buying albums for £25 now should expect to make a good profit in the short term but long term (and in the Music Business that’s a year) they should expect to double their money. This fantastic return will obviously attracted more speculators who in turn will drive the price up faster because where else can you double your money every 12 months and the value of vinyl won’t go down unlike stocks and shares.
Yes the future is vinyl.
13 May 2011
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