Wax on the Come Back? Best Buy is Giving Vinyl a Spin?

The consumer-electronics giant, which happens also to be the third-largest music seller behind Apple's iTunes and Wal-Mart, is considering devoting eight square feet of merchandising space in all of its 1,020 stores solely to vinyl, which would equate to just under 200 albums, after a test in 100 of its stores around the country proved successful.

Though vinyl represents less than 5 percent of Best Buy's music sales, the format is growing while CD sales continue to shrink.

Vinyl sales grew 15 percent year-over-year in 2007 and 89 percent in 2008, making the 1.9 million vinyl albums purchased last year the most since Nielsen SoundScan began tracking sales in 1991. This year is shaping up to be even better, with 670,000 vinyl albums sold through mid-April.

By contrast, CD sales have fallen at a roughly 20 percent clip for the past few years.

To be sure, the growth in vinyl, even when combined with digital sales, isn't enough to offset the decline in CD sales. But it does show that consumers haven't abandoned the physical format.

And the fact that a retailer of Best Buy's size is willing to expand vinyl offerings is an incremental positive for the beleaguered music industry. A typical Best Buy store features about 16 square feet to 20 square feet of music merchandise and displays about 8,000 CDs.

"Our goal is to occupy as much square footage as possible with music products," said Atlantic Records CEO Craig Kallman, whose personal vinyl collection numbers more than 300,000, making it one of the largest private collections in the world.

Hoping to capitalize on the renewed interest in vinyl, all of the major record labels have combed through their catalogs to remaster and re-release marquee titles with their original artwork and packaging -- both of which are essential elements for the vinyl consumer.

For instance, EMI in September 2008 launched its "From the Capitol Vaults" vinyl initiative with such titles as The Beach Boys' "Pet Sounds," Jimi Hendrix's "Band of Gypsies," and Radiohead's "OK Computer."

Compared with a CD, vinyl costs more to make and retails for a higher price -- $22.95 vs. around $13.99 for a CD -- but has lower margins.

Both Kallman and Jason Boyd, EMI's senior director of catalog sales, said profits made from vinyl were acceptable enough to warrant producing the format.

The situation is the reverse for Best Buy. Chris Smith, the company's senior music merchant, said margins on vinyl sales are "healthy enough" to mitigate the risk that comes along with not being able to return unsold inventory like it can with CDs.

The Vinyl War Begins

Press Editor Mike Lloyd spotlighted me in his weekly column this past Sunday, and he mentioned I started this blog to track what's going on at independent music stores.

While that's clearly not the only thing I write about, the indie-music world has been a big part of it, and I'm grateful to have a mainstream platform to vent on behalf of a relatively esoteric subculture. Here's one of my quotes from his column I'm rather proud of:

• "There are music fans who appreciate the chance to shop at stores where the personnel did more than put on blue shirts."

That was a not-altogether-subtle dig at something I believe is killing the music industry. Just as downloads have devalued CDs to basically nothing, big-box retailers have put the squeeze on independents by selling music as a loss leader. The reason you can get a new release at Best Buy, Circuit City, etc., for eight bucks is that they're selling this stuff below cost in order to lure people in to buy appliances and higher-priced media.

The silver lining for indies in the past few years -- the survivors, anyway -- has been vinyl.
The reasons for the LP's most recent comeback are numerous and well-catalogued, and the benefits for retailers are obvious. The customer base is loyal, and the product can sell at a higher profit margin because not many stores carry it. (Disclosure: I hang out at Vertigo, like, all the time.)

It was with a bit of sadness, then, that I read this article the other day. The big dogs, apparently, have gotten a whiff of vinyl, whose skyrocketing sales couldn't have stayed under the radar for long.

So the indies gear up for yet another fight. But when it comes to the battle over vinyl, my money's on the record-store geeks, not the blue shirts...

Technics SL-1200MK6 Turntable

Technics just announced the newest member of the 1200 family which will be labeled as the Technics SL-1200mk6. It will be available in black and classic silver finishes. The updates to this new 1200 are:

There isn't much of an update here at all, but with the 35th year of the 1200 approaching, I guess they saw it fitting to release a new deck. Also for purchase is a limited 1000 qty run of SL-1200mk6k1 editions which will include a gold framed disc and a 55 page book which shows all 35 years of the 1200 legacy. No prices have been released as of yet...

1. -High-quality materials OFC (oxygen-free copper wire) adopted by the S-shaped tone arm
2. -Further vibration damping to the realization of the three-tiered cabinet
3. -Continuous pitch control accuracy improvement
4. -Long-life high-intensity blue LED needlepoint adopted

Information on Pressing Vinyl