Vinyl Generates More Revenue Than YouTube Music, VEVO, SoundCloud, and Free Spotify COMBINED

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Vinyl sales have been surging for years.  But now, the oldest format on the market is generating more revenues than all ad-supported on-demand streaming music services, combined.  According to data released this week by the Recording Industry of America (RIAA), vinyl sales reached $221.8 million on 9.2 million units at the half-point of this year in the US, a 52.1 percent year-over-year surge.

That’s more than all music royalties generated by YouTube Music, VEVO, SoundCloud, free Spotify, and all ad-supported, on-demand streaming music platforms combined during the same period.

Collectively, free music streaming earned $162.7 million during the first six months of this year, according to the same RIAA data set.

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The vinyl total also includes EPs, though singles (45s) separately sold $4.2 million on a volumes of roughly 400,000 units.

31 Responses

  1. Remi Swierczek

    Mr. Grainge and Mr. Morris, some honor please, evacuate music boat on your own right NOW.

    Random rats have a chance to save it by accident!

    Reply
    • Remi Swierczek

      Clueless Cue on Ek’s DOPE won’t save you!
      Billion credit cards and $200B bucks is not for your salvation.

      Reply
    • If only it was generating more PROFIT

      I’d have to see some balance sheets to get into this, but the costs on producing vinyl are incredibly high.

      Revenues are high because the retail cost of vinyl is so high, but drilling down into those numbers most of the costs eat up those revenues for labels and artists – although retail seems to be doing ok as it’s all margin.

      Reply
      • Faza (TCM)

        The funny thing is: it probably is more profitable, which is why people are doing it.

        The real story for me is not that vinyl revenues are high – because, frankly, they’re not – but that ad-supported streaming revenues are so low. We are, essentially, comparing the most popular music format right now (given that YouTube is included) with the least popular and the unpopular format is winning.

        If we also begin to consider differences in how royalties are split, vinyl probably wins out easily as well (as mentioned below). Again, there’s little incentive to get into the vinyl game unless the numbers add up.

        Reply
        • Beatrix

          I’m not sure that Vinyl qualifies as “least popular”. In certain demographics vinyl is extremely popular, and vinyl sales are at their historic all-time high.

          Reply
      • Faza (TCM)

        Addendum: I got some quick quotes and it turns out that my guess – that pressing vinyl isn’t terribly expensive, per unit, even for small runs – was correct. Coupled with the high retail price it may make vinyl the most profitable medium – per unit sold – in trade at present.

        Pretty much the only problem with vinyl is that the quantities sold aren’t spectacular, which means in cannot prop up an industry with high fixed costs by itself. However, as the streaming counter-example shows, even a highly popular medium does not change the otherwise dreary outlook if its per-unit profitability is laughable.

        Reply
        • RS

          You also have to factor in packaging costs, shipping costs, storage costs, etc. They push the cost of a vinyl LP up. Also, record companies generally make artists pay for the packaging. And if you are on an indie label with a sub-distributor for foreign territories, they are going to deduct shipping and storage as well as the main label.

          Reply
      • Please Pay Attention

        “The real story for me is not that vinyl revenues are high – because, frankly, they’re not – but that ad-supported streaming revenues are so low.”

        This is total revenue of vinyl vs. net royalties of only ad-supported streaming. Two totally different figures that are not even remotely comparable.

        ” We are, essentially, comparing the most popular music format right now (given that YouTube is included) with the least popular and the unpopular format is winning.”

        No, Paul is comparing apples to shetland ponies. Gross revenues for a total product category vs. net royalty payments for just one segment of another category.

        Not only is ANY comparison of gross revenue vs. net royalties totally useless, but there isn’t a free, ad-supported vinyl business category, either.

        What do you think the comparison between ad-supported streaming royalties and free, promotional vinyl royalties is? It’s $162 Million to $0.

        If we also begin to consider differences in how royalties are split, vinyl probably wins out easily as well.

        Not even close, as is laid out below. Indeed, total vinyl royalties don’t even come close to JUST ad-supported streaming royalties (never mind ALL streaming royalties).

        Reply
        • Bingo

          Well, in Paul’s defense he at least edited “Royalties’ in the title after I called him out on the ludicrous comparison. heh…you owe me one Paul.

          His answer? A cheeky dodge. heh…it still lacks any substantiated facts and real numbers as to Vinyl royalties. How does Paul actually KNOW what the Vinyl royalty payments were? He doesn’t. It’s a hipshot “best guess” based on total revenue. LMFAO

          Reply
  2. Bingo

    Paul. Seriously? You conflate royalties with gross revenue? Have you no sense of honor whatsoever?

    Show some truth math silly boy.

    Reply
    • Paul Resnikoff
      Paul Resnikoff

      OK, that’s an interesting point. Well, vinyl does produce more artist royalties than ad-supported streaming, especially given higher per-unit payments, greater artist control over the product, and generally lower shadiness surrounding vinyl — but okay, perhaps I’ll just focus on the revenues.

      Reply
      • Probably True...

        Yeah… Ok… Vinyl is PROBABLY generating more royalties for artists then ad-funded streaming but that’s also like saying Vinyl is creating more royalties then piracy… the bar is not too high there.

        The real trick with Vinyl is that you have to sell out of each pressing to make the numbers work. Unsold copies or a couple of bum titles and the numbers go completely (and horribly) upside down. Vinyl isn’t really a cash cow so much as cool factor that hopefully pays for itself. If done right it’s a small profit.

        Reply
        • Paul Resnikoff
          Paul Resnikoff

          Great point: vinyl is a really tricky animal, and lots of upfront costs and huge penalties for not selling through. It’s another discussion entirely, though I’m noting a few startups that are trying to solve that issue with lower setup costs, smaller pressing possibilities, etc. Let’s see where this goes: if vinyl really goes big, you’ll see a lot of new companies and innovations coming in.

          (and then I realized: I was actually enjoying a civilized discussion in the comments thread… hey this ain’t bad..)

          Reply
          • Michael Hill

            Agreed, Paul. Sometimes we find civilization online, but rare animal these days. Discussion is what makes us intelligent, still. You made some very good points, however. If they can lower the pressing costs, we’re probably going to see more artists return to vinyl for some releases. It’s very possible. Appreciate reading your insightful comment here. Guess we’re all music lovers gathered.

          • dcguzman

            This is the internet. If Donald Trump can debate with presidential hopefuls and media respect him for it, why not us? If you cant take the heat get out of the kitchen. You can criticized anyone here because of there opinion, but dont judge what opinion is right or wrong. You cant make a intelligent debate with opinionated subject like royalties. The debate is as old as if God exists.

  3. billeeto

    i understand with vinyl, most retailers are not allowed to send back returns, and yet distributors still keep reserves against returns on the vinyl (even though its unreturnable). It’s really cool to be retro these days, so why not have the retro accounting scams of the old school days too?

    Reply
    • dvguzman

      So its like the physical copy of video games then? Theres a reason why there weekly and monthly discounts on video game stores I regular buy with, those are unsold games that the store needs to be cleared. Even today I just dont know how any industry can profit from a unsalable goods. Even a pirate store have the latest game than a legit store unless its popular and heavily advertised.

      Reply
  4. RickyLopez

    Thank you for the publicity [Paul] I’ve been selling vinyl since 1987. With troughs and peaks in equal amounts. Are we now the tallest man in a dwarve contest?
    FYI everybody. 90% of vinyl sells though at RRP. Unfortunately 90% of music doesn’t deserve to be pressed on vinyl.
    Get the accountants to split the difference

    Reply
    • John Matarazzo

      Gentlemen,
      The fact that a physical product (vinyl, CD) makes moneyand is profitable is no surprise. That’s what built the record business.
      However, risk/reward is always part of the equation. Press a 1000 LP and sell them all; you make, after Pressing/Packaging cost a net $1500. Press 1000 and sell 50 you lose.
      Get 1 zillion plays on YouTube and get a check for .05 cents. No risk and no reward.

      Reply
  5. Terrell

    This article has too much bias and not enough explanation.

    Are we talking licensing? Or simply profits? Are we taking into account the markup on Vinyl media and the content you are putting on it? Because then yes, it could make more, you could double your profit margin just by introducing another media type. I came here because of Google News and will be filtering this site out based on the type of journalism here.

    Reply
  6. Rickshaw

    What a crock. This ship is listing heavily, and without facts or explanation of statement.

    Reply
    • Bongo

      Agreed. It’s embarrassing. The lack of due diligence, forethought, fact checking, and objective non-biased reporting here is staggering. God bless the Internet and America!

      Reply
  7. RS

    Do any artists negotiate separate royalty splits for vinyl with their label? Most deals I’ve seen, including mine, are split between digital (download) and physical (CD, vinyl, even tape), with a separate clause for ringtones, etc.

    Reply
  8. buckbaran.com

    We are currently in retrograde. Vinyl is stepping stone. If we are going to wean ourselves off of oil this is a good place to start. And a good place to set an example. (That’s something music used to back then.) I’m under the impression that an entity has invested heavily in recycled vinyl and is imposing it on an unsuspecting public. Although I will admit that every now and then I whip out the old vinyl from the 50s and 60s and enjoy listening to the clicks, skips, loss of high end, noise in general and inconsistent volume levels. Vinyl is also a dust attractor. Anyway, we used to dump our vinyl to tape to preserve it. What a waste of resources.

    Reply
  9. iamthegif

    How can he combine Youtube Music with the other streaming platforms when it hasn’t even launched yet? You can only look at Youtube’s ad revenue overall or the revenue of certain artists and labels. He can add the revenue of Google Play but that’s not Youtube Music.

    Reply
  10. Steve Corn

    Yes, it’s very hard to judge profitability when discuss streams. Assuming the recording costs are the same whether you are producing a vinyl or CD or digital album (they do vary but are essentially the same), there are zero upfront costs to provide an audio file to your distributor and then to a streaming service. If you want to sell LPs at 10 different stores, you have to manufacture enough inventory and ship it to 10 locations.

    If you want to have your music stream to 10 services, you upload it once to your digital distributor, and, poof, out it goes without any immediate costs to the label or artist.

    So it’s arguable that a stream is 100% profitable. But in reality, I think that the notion of profitability from streams is less important than revenue. However with a vinyl, it’s just the opposite.

    Reply

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