Billed as the first on-demand vinyl manufacturer and service provider, elasticStage recently raised £3.5 million to support the roll-out of its innovative solution for artists.
The company has now got even more industry attention with a key appointment as COO - Raoul Chatterjee, former SoundCloud vice president, content partnerships & operations. Chatterjee is a label and digital platform veteran who clearly sees a major opportunity in the marketplace for on-demand vinyl.
As well as helping the many new and emerging artists, as well as those with a niche audience, the company is targeting record companies looking to increase income from the further reaches of their extensive archive. It comes at a time of challenges for the vinyl market with production capacity.
Following six years of development, elasticStage is readying the launch of its service to manufacture and distribute vinyl which the company says is both sustainable and ethical.
Here, Steve Rhodes, founder and CEO of elasticStage, shares his vision for the future of vinyl and how his company could play a key role in the continued growth of the format…
What's the vision and model for elasticStage - how can it help artists and the music industry?
“The current model of making vinyl records is totally outdated and not suitable for the current and coming generations of creators. There are a vast number of creators, growing at a rate of 30% per year, totalling almost 50 million. Long gone are the days where a few hundred artists sold millions of records. Now we have millions of artists selling hundreds of records and the current vinyl infrastructure is not equipped to deal with this.
“The book business and Amazon specifically understood this 10 years ago and gave anyone the tools to self-publish their paperbacks globally on their platform via their revolutionary on-demand platform. They now make up more than half of the books sold on Amazon. elasticStage is giving music creators a complete and easy-to-learn infrastructure via a web browser, free-of-charge, where they can create and sell vinyl records and CDs, and earn money from the first record sold. They can release and sell a record within one day. We think that vinyl is still not mainstream, but rather where MP3 players were in 1998, before Apple came and showed everyone how it needs to be done.”
Can your vinyl releases become chart eligible and help first week chart positions?
“Yes. The beauty of our tech is that we have instant supply. Sometimes a few hundred vinyl records can make a difference of being No.1 or No.3 in the charts. If you have a surprise hit like Kate Bush, for example, our tech can help bolster your chart positions.”
elasticStage is not just a manufacturer but a complete service from creation to getting the vinyl into the consumers’ hand
Where does it fit in the growing vinyl market - who will your clients be?
“On-demand vinyl has many interesting markets. I already mentioned the huge creator market - new or semi-professional musicians making music, who don’t have access to vinyl. In addition, we give the majors ways to monetise their huge back catalogues, where in theory any title could be available quickly and all the time with our platform. At the moment, very little is available.
“Another interesting avenue is the compilation market that would allow customers to make their own playlist in vinyl. Also, we can offer a red heart-shaped vinyl, where you put the favourite songs of your partner onto a record with a custom-designed record sleeve.”
What kind of capacity can you bring to the market?
“Our partner, building the vinyl machines and factories, is a world leader in engineering and automation, owned by a Singapore holding with deep pockets. They have subsidiaries in Germany, California, China and Singapore. They work for companies such as Tesla. With their help, we can scale to hundreds of millions, even one billion vinyls, that the rising creator market will demand within the next four years. It’s a huge undertaking and we are already talking to the right people to build facilities the size of an Amazon fulfilment centre in the UK and the US. Our technology can scale very similarly to data centres. Our vinyl machines are fully automated and have an ethernet and power plug. You want more records, you put more of these machines in a big room. There are no chemicals, no set-up or any kind of preparation. Somebody orders a record on our webstore and these machines make a record fully automatically.”
How does the finished product compare to a standard vinyl product?
“It looks and feels like a normal vinyl record. The difference is that we don’t use PVC, which is proven to be carcinogenic and hard to recycle. We can assume that very few people throw vinyl records away, so using plastic is not a real problem. The elephant in the room is the enormous amount of energy needed by the old method of making vinyls, as well as the chemicals involved. Our way is greener and cleaner, but most importantly the quality is much better as our record is a first generation recording, versus - usually - a fifth generation copy of the master disc. Not only is the sound quality better, judging from the first tests we made for the industry, the production quality is more consistent with less pops and clicks that can ruin the vinyl experience.”
Can you do multi-format D2C options, with coloured vinyl?
“Yes, we can, although this will not be a launch feature. Most of the creators are happy to have access to a good quality black vinyl, and we found black vinyl still sounds the best. You can’t beat that. Having said this, we offer not just creators, but buyers the option of choosing their favourite colour at the checkout.”
Will there be a premium cost for on-demand?
“By offering a full service from production to fulfilment to our own store, we were able to offset the higher cost of on-demand vinyl. Just eliminating warehouses and additional shipping costs enables us to sell vinyl at a competitive price. We aim to sell a standard album for £19.90, but there will be premium price options for limited editions. You must understand that elasticStage is not just a manufacturer but a complete service from creation to getting the vinyl into the consumers’ hand. We take away the pain, cost and limitations. We make it a beautiful experience for creators and buyers alike.”
Our goal for the first year will be to partner up with at least one leading streaming company to tap into the creator market
How are your investors helping in terms of industry advice?
“Some of our investors are from the music industry. They give us first credibility, but also could be our first customers. Other investors are coming from our suppliers and people that have expertise in making vinyl records, sleeves, engineering in general or finance. With that you have a clear understanding, on one side, of what the market wants and needs, but, on the other side, also, what’s realistically possible to build. We have around 90 investors and it was a mammoth task to convince every one of them to risk their hard-earned money to build the vinyl solution of the future. Step-by-step, we were able to prove to them it is possible, but equally some of them were helping to make a dream come true.”
What does the funding help you achieve?
“We had two funding rounds. With the angel round we built a few prototypes and the web platform, demonstrating it is possible to make on-demand records at a decent quality, selling them through a world-leading online store. With the seed round, we started building the first factory vinyl machine that could be scaled up to global demand and also improved the quality further. Our goal for the first year will be to partner up with at least one leading streaming company to tap into the creator market. Streaming companies know that if they want to be taken seriously with the creators they have to offer vinyl. For the labels, even small capacity that is available rapidly can help with chart positions.
“We are currently getting our first facility in north-west London and will be able to produce the first test for the DSPs and record industry. It will serve as a showcase for the upcoming A-round, when we will raise capacity, and be able to print record sleeves in-house.”
What's the ambition for the next 12 months?
“Showing the industry that what we have works, by partnering up with labels and DSPs. The quality and speed will speak for itself, and after that they sky's the limit, as we can increase to any capacity rapidly. The next 12 months will be the template for a very large facility in the UK and the US, both going online in 2024.
“What we have built was incredibly hard. Most people have no idea how hard it is to make vinyl records and the supporting artwork. The industry is still using machines that are more than 50 years old. Some of the people who have built them took their secrets to the grave. What we have built was thought to be impossible. People are very sceptical at first when you say you can do the impossible. Now is our time to prove to the world we actually can do it. And once we do, we will scale up to global demand. We have everything in place to get there.”
Given the capacity problems for vinyl, can you help maintain growth for the format?
“For any format, it’s paramount that you have a vast catalogue of titles as well as good availability. When I launched elasticStage six years ago, I wasn’t even able to easily buy an Oasis record in England. How can this be possible? In order to maintain growth, you have to expand the catalogue size, make sure everything is always in stock, have a beautiful and reliable store, possibly integrate with DSPs and capture the emerging creator market. If you can give vinyl to 50 million creators, you harness the power of 50 million people marketing your product. This is incredible just for one company. It could make us the biggest record company in the world.”