Warner Music Group's latest results underlined a trend in Q2: huge increases in physical music sales. Vinyl is, of course, a format whose growth we have been carefully tracking.
A large part of that may be down to year-on-year comparisons with Q2 2020, when Covid hit physical music sales as stores closed. This time last year, physical album sales slumped by 45.1% year-on-year.
But the latest figures are still positive news for artists, labels and retailers following the reopening of record shops, which had been forced to trade online or offer click-and-collect options during pandemic restrictions.
Here, Music Week breaks out some of the key stats and exec insights from our subscriber-only Q2 analysis.
Here’s a statistic you may not have expected to read in 2021: physical albums far outperformed streaming growth in Q2 with a year-on-year uplift of 34% to 4,479,081 units (streaming was up 10.4% year-on-year), according to BPI data.
The vinyl resurgence continues, with LP sales up 58.7% year-on-year in Q2 to 1,271,699 units. The BPI recently forecast that revenues from high-value vinyl releases could overtake CDs this year.
But there was also a CD boom in Q2 with sales volumes for the quarter up 26.6% to 3,151,130. Cassettes only managed growth of 2.1%.
Record shops returned after the post-Christmas lockdown and there was the first vinyl drop of Record Store Day, as well as the impact of HMV’s centenary activity (yet to be recorded in quarterly results). The Love Record Stores promotion returns next month, along with the Hyundai Mercury Prize.
The vinyl revival has been something of a buzzword in our industry over the past five years
While the yearly comparison may be flattering to physical formats because of a poor Q2 last year, the quarter-on-quarter growth of physical this year was also robust - up by 13.4%.
“The vinyl revival has been something of a buzzword in our industry over the past five years,” said Charles Wood, Sony Music UK’s VP of market planning and media. “But even then, vinyl collections were still somewhat limited to music fanatics or cool kids who treated vinyl as their artisanal format of choice. Vinyl was ‘cool’ again, but that didn’t necessarily mean that it appealed to everyone.
“But throughout the pandemic, sales of turntables jumped and we have noticed that vinyl now has renewed appeal across all ages. We heard reports back from retail that teenagers, who had never thought to buy a CD, had bought turntables and were building vinyl collections. The pandemic also meant for some that they had more disposable income to spend on buying music as they were not going to gigs and used this to build collections.
“Because of this broader installed base, vinyl is now becoming an even more important part of the product suite for new releases – particularly for fan-based acts.”
The pattern of vinyl consumption does suggest a new and perhaps younger audience for the format. For the first six months of last year, the Top 3 vinyl releases were catalogue titles. But this year, the Top 3 vinyl titles are new releases - Lana Del Rey’s Chemtrails Over The Country Club (Polydor), followed by Wolf Alice’s Blue Weekend (Dirty Hit) and Royal Blood’s Typhoons (Warner Records).
Sony has Foo Fighters’ Medicine At Midnight (RCA) in the Top 5 vinyl releases for the half-year.
“This increase in new release activity has driven the rise in the market, while demand for classic catalogue remains strong,” said Charles Wood. “The challenge we all have is the limited production capacity across Europe and this tends to hit catalogue harder than new releases. We are sure that if we could make more, we would sell more.”
There’s still some way to go to get ahead of the unprecedented demand but signs are encouraging
However, Warner Music’s Derek Allen, SVP of commercial, is optimistic about the supply of vinyl.
“2021 has been significantly less impacted by the almost total shutdown of UK bricks and mortar retail experienced in 2020,” he told Music Week. “Increased capacity across European vinyl manufacturing has enabled much of the industry to at least come close to keeping pace with demand. Obviously, there’s still some way to go to get ahead of the unprecedented demand but signs are encouraging.”
The Q2 performance means that physical albums (including CDs) actually posted a 1% year-on-year increase to 8,429,098 units for the first six months. The vinyl increase so far this year is 35.8% (2,352,352 units).
The one serious blow to physical music yet to be felt is the planned withdrawal from CDs by Sainsbury’s (vinyl will still be sold in their supermarkets).
“We are sorry to see Sainsburys leave the market – they have been great to work with over the years,” said Sony’s Charles Wood. “We are still very lucky to have three supermarkets, HMV, Amazon and the independents in the market and we will do all we can to help them continue to thrive.”
“It’s obviously disappointing when a commercial partner exits the market, but to be honest we’ve been aware of Sainsbury’s plans for some time,” added Derek Allen. “The withdrawal has been gradual with support set to continue through Q4 before a total exit. So any impact will be modest within that exit strategy.”
Subscribers can click here for our full Q2 analysis.