Needle points north on vinyl sales

John Egan, a local blues/rock musician, flips through the vinyl records in Cactus Music. John Egan, a local blues/rock musician, flips through the vinyl records in Cactus Music. Photo: Karen Warren, Chronicle Photo: Karen Warren, Chronicle Image 1 of / 1 Caption Close Needle points north on vinyl sales 1 / 1 Back to Gallery

Over the past year, the increase in stories about the Return of Vinyl have mirrored vinyl sales themselves. This is likely because the old record is a rare area of discernible growth in music retail, and these days people will run with anything on the rise. CD sales have fallen about 45 percent since 2000, but vinyl is moving in the opposite direction, albeit at a less sharp angle.

According to a recent Los Angeles Times report, more than 1 million vinyl albums sold through the first five months of 2009, which puts the format on target to easily exceed its 2008 figure of 1.88 million, according to Nielsen SoundScan. That figure is often hitched with the killjoy notation that it nevertheless makes up less than 1 percent of all music sales in the country; Nickelback, for instance, sells that many CDs in a month or two.

The toe-in-the-water exploration of vinyl as a source of revenue is further evidenced by the fact that Best Buy — the country’s third largest music retailer behind Apple and Wal-Mart — got into the action last month. Best Buy won’t, however, be receiving an invite for the new Vinyl Saturday, a Record Store Day initiative launching this weekend.

Still vinyl sales are important to smaller stores. Michael Kurtz, co-founder of Record Store Day, a coalition of independent music retailers, suggests that vinyl averages between 3.5 to 7 percent of indie retailers’ sales. Local retailer Cactus Music reports 20 percent of its overall sales are from new and used vinyl.

“Vinyl’s not going to go away,” says Andy Kotowicz, vice president of sales and marketing, at the Sub Pop record label. “If the CD didn’t kill it, I don’t know how the download could. It’s as impractical and bulky as ever. If it was going to die, it would’ve been 10 years ago. We’re thrilled to see the sales as interesting as they are now. But is it ever going to be the main delivery method? Absolutely not. Is it ultimately going to make up for lost sales? I don’t think so. But it means something to people. Nobody feels sentimental about CDs, but they do about vinyl.”

Monthly Vinyl Saturday

Toots and the Maytals’ Funky Kingston record was between Radiohead’s In Rainbows and Depeche Mode’s latest. Quinn Bishop, owner of Cactus Music, thinks vinyl is a niche market that requires low quantities of greatly varied product, which doesn’t fit with Best Buy’s limited variety, heavy volume. “It’s not like Best Buy put a huge model train section in the store … but it’s not that different,” he says. That said, Bishop points out, “it’s to a certain degree cool because not every kid with a turntable has an independent store around the corner from them.”

Some avoiding CDs

Because of its cost, vinyl — unlike CDs — can’t be returned to the record label if it doesn’t sell. Bishop suggests there would be an independent retailer fury if the policy was altered for Best Buy. But Kurtz says “stores are a little paranoid because the box stores work creatively to get better terms. Maybe they don’t get returns, but they’ll lobby for more marketing dollars and then just fill the garbage dumps with unsold albums.

“It goes back to that idea that was so problematic with CDs: undervaluing the product. This sort of thing has happened in the past.”

Some artists are now sometimes avoiding CD production altogether or using it almost as a flier. Local musician Robert Ellis pressed vinyl of his new album, figuring anybody who wanted it digitally would just share it. He gives away homemade copies of the CD at shows, though he says “people seem to feel guilty and they buy the vinyl.” Ellis didn’t have the money to make both a proper CD and record. The profit margin on the vinyl is less than it would be on a CD, but he says he’s “overall happier with the product.”

Kotowicz says some of the label’s smaller bands see 30 percent of their sales in vinyl.

The uncertainty is how many people can make money off vinyl. Ellis’ scale is smaller — he printed 300 LPs — than a band like Radiohead, which sold more than 100,000 copies of its last album in a CD/vinyl package. Ellis’ unit cost was $8.50 for the first pressing with a retail price of $14.95. (Note: That cost included the expensive “plating” process from which the vinyl is pressed. Since Ellis owns the plate now, subsequent pressings will be cheaper.) It’s small change compared to bands with five- and six-figure sales, but it keeps the music and the money closer to the artist. And without as many hands touching the money, a mid-level band could conceivably find a way to make some combination of music (through a label or not) and merchandise and touring pay the bills, the polar opposite of the mammoth deals signed by Jay-Z, U2 and Madonna with large corporations. Kotowicz wouldn’t rule out the idea of such a grass-rootsy viable business model but suggested a long overdue overhaul of the entire industry was required before a solution would be found.

The best chance

Still, vinyl stands the best chance to salvage the idea of a tangible album.

Many artists are reluctant to call the album dead, despite the fact that digitizing it allowed the dismantling of a set of packaged songs. With pop singles relegated to download only, vinyl might be the last haven for bundled music with cover art and notes. After years of programming CDs, some artists raised in the digital era seem to be returning to a classic album length between 35 and 45 minutes. Austin musician Ben Kweller’s latest, Changing Horses, is short: 10 songs, five per side, closing the first with a ballad and opening the second with an uptempo song.

“It’s completely old school — an album made for vinyl,” Kweller says. “It was all analog transfer. These songs never touched a computer.”

The packaging of Elvis Perkins’ Elvis Perkins in Dreamland album included a break between two middle songs. Perkins was philosophical on the subject. “We knew we were going have two sides on the LP,” he says. “So it’s printed that way on the CD. We were charmed by the mystical object that is an LP. I’ll take that sort of reference in the cold and binary world we live in these days.”

andrew.dansby@chron.com