The great vinyl rip-off
Vinyl sales are booming, but are consumers paying over the odds?
Walk into any JB Hi-Fi store and you'll notice that the floor space devoted to vinyl is more visible and often larger than the area devoted to CDs. Vinyl has staged a remarkable comeback in the last decade, appearing to become the dominant physical format at a time when music consumption has largely shifted to subscription streaming services like Spotify and Apple Music.
Actual sales figures demonstrate the story isn't quite that simple. This week the Australian Recording Industry Association (ARIA) released 2017 wholesale sales data. Digital formats now predominate, adding up to a total of $294 million. Streaming is the biggest chunk of that, grabbing $159 million in sales.
Physical formats are much smaller, collectively accounting for $96 million in sales. It's true that vinyl is the only category there which has grown, with 786,735 units sold during the year compared to 655,301 in 2016. Yet while CD sales are declining, there are still far more being sold. During 2017, Australians purchased 8,025,166 discs. That's more than 10 times higher than vinyl sales.
A different and revealing way of looking at these figures is to calculate the average price for each format. That shows that vinyl lovers are paying a hefty premium for those big 12" discs.
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Remember these figures are based on wholesale prices. In most cases what consumers are paying is close to double this, typically around $20 for a CD and $40-$50 for a vinyl album. But the trend is evident: you are paying twice as much for vinyl as for CD. Some of that is due to higher manufacturing and shipping costs. Some of that is because the lower volume sales mean there's less room for cost-cutting. But a lot of it is because people buying vinyl are willing to get ripped off, putting up with overpriced limited editions and reissues of older albums that are near-indistinguishable from what you could pick up second-hand for a tenth of the cost.
I've written before about how the success of vinyl is much exaggerated, and these figures confirm it. While it's true that vinyl sales are growing much faster than CD sales, many more CDs are still being sold. If the trend continues, we might eventually see vinyl take over, but it hasn't happened yet. It's also possible that vinyl will plateau, and that it and CDs will meet in the middle.
There's even a chance that cassettes will make a comeback, as a handful of artists have been experimenting with the red-headed stepchild of the physical music market. For instance, Kylie Minogue sold out a limited run cassette edition of her latest album, Golden. With music, there's always the potential for nostalgia.
Angus Kidman's Findings column looks at new developments and research that help you save money, make wise decisions and enjoy your life more. It appears regularly on finder.com.au.