Music industry watchers know that vinyl records have been enjoying a resurgence since their near-death in the mid-2000s, and the market continues to grow. But vinyl sales are actually much larger than what industry figures report, because they don’t count used vinyl sales and they under-count new vinyl sales. Now, thanks to some new data, we know that the true size of the vinyl market is more than double those industry figures.
Revenue from sales of used records is particularly significant in the digital era, now that most of the attention is on streaming, where users can’t “resell” music. The music industry doesn’t bother to count used sales because no revenue from used sales goes to record labels, artists, or songwriters. “Given the size of the overall market, I am always shocked that these numbers are ignored when reporting sales,” says Ron Rich, SVP of Discogs Marketplace, one of the two largest online marketplaces for used records, along with eBay.
In honor of eBay’s first-ever Vinyl Obsession Week, the company has offered a rare glimpse into its vinyl sales data. Discogs also supplied data for this story. A household name among record collectors, Discogs is an online database of detailed info about physical music products — mostly vinyl — that launched in 2000 and started its e-commerce marketplace in 2007.
Both Discogs and eBay have very large catalogs of used vinyl available. Discogs lists 5.7 million used vinyl items in its marketplace from U.S. sellers (Discogs doesn’t distinguish between new and used; it only lists items by condition. The 5.7 million figure doesn’t count a million items rated as “Mint”). eBay lists 2.3 million used vinyl items from U.S. sellers. Amazon is likely the third-largest player in this space; it lists about 900,000 used vinyl records on its U.S. site. If those numbers seem small compared to streaming catalogs like those of Spotify and Apple Music, bear in mind that Amazon is the largest online seller of new vinyl but lists “only” about 300,000 new titles. (Amazon declined to provide sales data.)
These online marketplaces also sell several million vinyl records per year. As the figure above shows, unit sales numbers from eBay and estimates based on Discogs data added up to about 6 million last year. Compare that to new vinyl sales, which reached 16 million units and $395 million in revenue last year, according to RIAA figures. (Skeptics counter that this is a far cry from vinyl’s early 1980s market peak, when vinyl pulled in $2 billion from 300 million units.)
The figure also shows Discogs’ sales are growing at roughly the same rate as new vinyl sales, while eBay’s sales have stagnated. Discogs is becoming the preferred marketplace for serious record buyers and sellers. That’s because Discogs requires that sellers submit highly detailed metadata about music releases — including such things as identifiers, country of release, pressing information, artist credits, and conditions of both discs and sleeves — whereas eBay has looser metadata standards to encourage more casual sellers and buyers (and, of course, supports auctions). It takes more effort to list your records on Discogs, but collectors like having all that information.
But these figures don’t count offline sales — of which there are more than online. Discogs’ Rich says that their online sales represent only “a fraction of what is out there in the used market, considering the amounts of used inventory selling through local record stores.”
Estimated physical retail sales of used vinyl are shown in green in the figure above. The estimates derive from data provided by Zia Records, a chain of independent stores in the Southwest. There are about 1000 true indie record stores in the U.S., plus others that sell a few vinyl items among books, clothing, coffee, etc.
Notice that the total is slightly greater than the RIAA figres for new vinyl — and it doesn’t include data from Amazon (which declined to provide data). In other words, the overall vinyl market is more than double the RIAA figures, over 30 million units in 2017.
But it’s even bigger than that, because a lot of new vinyl sales aren’t reported. Zia’s Steve Duncan says that most indie retailers don’t bother to report their sales data. The retailers that do report their new vinyl sales include Amazon (which accounts for the bulk of online sales) and specialized retailers like Urban Outfitters, Hastings, Hot Topic, and FYE, which together have about 1300 retail locations. 67% of vinyl sales take place in physical stores, which means that the total retail market has an equivalent of 2000 stores, or twice the number of indie stores. (Major retail chains like Best Buy, Target, and Walmart sell vinyl but with insignificant market shares.)
So, if most of the 1000 indie retailers don’t report sales, that’s about a third of retail sales of new vinyl going unreported, meaning that new vinyl sales are likely to be about 50% higher than the RIAA figures. That means that the the true total size of the vinyl market in unit volume — new plus used — is about 2.5 times what the RIAA reports.
Revenue is a different matter. Because used vinyl is cheaper than new, total revenue for vinyl should be less than 2.5 times the RIAA numbers. But it’s still a lot higher.
The used records that sell online on Discogs, eBay, and various small sites that focus on special interests such as classical, jazz, and rarities tend to be collectors’ items with higher prices. In fact, online used prices are almost as high as new vinyl prices: eBay reports average used prices around $23, compared to $25 for new. Vinyl is expensive to ship, so the cheaper used items tend to sell in physical stores instead of online. Used record stores also usually have bargain bins where the records are cheap and not cataloged as they are on Discogs or eBay. Zia’s average used in-store vinyl prices are around $5.
This figure puts these numbers together and estimates total vinyl revenue, including used. The revenue numbers are almost double the RIAA figures, and they don’t count Amazon as well as venues such as flea markets (like Brooklyn Flea, pictured above, which hosts several used vinyl sellers each week) and garage sales.
This means that vinyl is on track to surpass two categories of music revenue next year, both of which are dropping. One is digital radio, such as Pandora and Sirius XM satellite radio — two companies that merged last week.
The other is CDs. The RIAA’s recently-published figures for the first half of 2018 show CD revenue falling off a cliff — dropping more than 40% in both revenue and unit volume from the first half of last year. Yet unit volume of CD sales remains much higher than vinyl, especially with used CDs taken into account. Why is that? Because CDs are now actually cheaper than vinyl. They aren’t considered collectible items as vinyl is … at least not yet.
Sales and price numbers indicate that vinyl collecting spiked in popularity around 2011. That was the year when the music industry began its big shift to streaming. It was the time when music fans found that the best way to hear music digitally was on demand from an enormous online library rather than through permanent downloads that you have to buy and accumulate. In other words, streaming — where you don’t own the music you listen to — made the ownership qualities of vinyl more apparent.
The question now is whether CDs will ever become collectible as vinyl records are. It may simply be a matter of time: it happened to vinyl 30 years after its peak in 1981 and five years after its nadir. But think of the factors that contribute to vinyl’s mystique: the analog audio quality, the ritual of putting the record on the turntable and placing the tonearm, the ample 12-inch canvas for cover art and liner notes.
CDs have none of these qualities. Those who want great audio quality and aren’t vinyl snobs are happy with FLAC (lossless compression) file downloads, which usually have better audio quality than CDs. CDs will need their own mystique factors if they are going to have a renaissance as big as vinyl’s.