New revenue figures from the Entertainment Retailers Association (ERA) showed that vinyl now outsells CD in terms of value.
In the current issue of Music Week, we quiz the retail sector and trade bodies about the long-term potential of the format and its Q4 impact.
HMV has just issued positive financial results for 2021-2022, which show revenue up by 66.8% year-on-year to £150.8 million, while gross profit increased by 64.% to £65.4m. Operating profit was £2m.
“During the year, HMV demonstrated their appetite for stretching customer reach by opening more stores and [is] set to continue the focused expansion building on the brand and diversified growth,” stated HMV in its strategic report.
Taylor Swift’s Midnights (EMI) was the biggest seller on vinyl in 2022 with more than 89,000 units sold in two months, according to the Official Charts Company. Eight of the Top 10 vinyl sellers in 2022 were released in that year - an encouraging move away from the catalogue focus for the format.
Vinyl has played a key role in HMV's performance, following investment in stores as part of an expansion plan to support the format's growth.
Here, HMV & Fopp MD Phil Halliday opens up about how the format is delivering results for the music retail chain…
We’ve seen record-breaking vinyl results from Taylor Swift as well as similar highs for the format from Arctic Monkeys and Harry Styles. Was it a bumper year for music retailers?
“2022 was a great year for physical music sales, driven by a well-paced calendar of key releases that’s given customers a reason to keep coming back to our stores. Harry Styles, Liam Gallagher, BTS, Ozzy Osbourne, Robbie Williams, Taylor Swift, Arctic Monkeys, Bruce Springsteen, Louis Tomlinson and Stormzy have sold brilliantly.
“Our tentpole retail moments, such as Vinyl Week, as well as October’s National Album Day, which saw the launch of India Arkin’s Home Truths exclusively at HMV on 1921 Records, have seen tremendous sales. On National Album Day we put on 190 gigs from new artists in our stores through our HMV Live & Local programme – taking us to 1,000 in total for the year – again driving vinyl sales from music fans.”
“What we’ve seen in 2022 is that vinyl has become a major force in promoting new releases, as well as delivering superb sales on reissues such as George Michael's Older and, more recently, The Beatles’ Revolver.”
An expanded vinyl offering has been integral to the 15 new HMV shops we’ve opened this past year
How is the production and supply chain for vinyl at the moment - is HMV able to get the stock it needs to meet customer demand?
“The production of vinyl remains an issue, but there has been a massive improvement on the situation 12 months ago. There’s certainly an opportunity for growth in 2023, most notably on catalogue, where some segments have been significantly impacted over the last 18 months.”
HMV has announced store openings in the UK - how important is vinyl to the chain’s expansion?
“An expanded vinyl offering has been integral to the 15 new HMV shops we’ve opened this past year, and it’s paid off, with each of those shops performing ahead of expectations on music. We’re seeing our customer profile changing, and while our traditional physical music shopper is still here, we’re adding younger customers who are starting or growing their vinyl collection.”
What’s the outlook for 2023 - can the format continue its growth trajectory in challenging economic conditions?
“As production issues continue to ease, we’d hope to see pricing levelling out on some of the higher priced titles over the course of the next year. At HMV, we run a year-round three-for-£55 offer on vinyl across hundreds of titles, offering value across classic and recent releases. Consumers will be more considered, but we're still looking forward to another record-breaking year for the format.”
Subscribers can read the full report on vinyl here as well as the latest figures from the BPI and ERA.