Is 2022 the year that CD finally ends its three decades as the physical format of choice?
Based on market data for 2021, that result now almost seems inevitable in value terms.
According to figures from the Entertainment Retailers’ Association (ERA), vinyl albums brought in £135.6 million in 2021 (up 23.2% year-on-year) compared to £150.1m in CD sales (down 3.9% year-on-year). On the current growth trajectory, vinyl will be ahead by the end of 2022.
Based on unit sales from the BPI, CD still remains ahead of its rival. There were 14.4m compact discs sold (down 10.5% year-on-year) compared to 5.3m vinyl LPs (up 10.6%).
But speaking to Music Week for our market analysis feature, Sony Music UK VP of market planning and sales Charles Wood predicts that vinyl will become the largest physical contributor to labels financially in the next 12 months.
“Following an uplift of interest in vinyl sales during Covid, we saw that vinyl was being purchased by a broader audience, beyond your music fanatics and niche format obsessives that drove the ‘vinyl revival’,” he said. “We saw continued growth for vinyl sales in 2021 – now making up 27% of the physical market in terms of volume. When you take into consideration a significantly higher price point for vinyl, we will soon see vinyl become the largest physical format in the market in terms of revenue.”
We will soon see vinyl become the largest physical format in the market in terms of revenue
Despite supply and production challenges, vinyl sales registered their 14th year of consecutive growth in 2021. It resulted in ERA reporting the first increase in physical music revenue in two decades.
“There’s no doubt that capacity issues continue to be a problem, but we are aiming to plan and manage our production schedules in order to give us the best chance possible of hitting our targets,” said Linda Walker, senior vice president, commercial, UK & Europe, at Warner Music UK. “Record Store Day continues to be an important date in the calendar and is something we have always been supportive of.”
ABBA’s Voyage was the biggest vinyl seller in 2021, followed by Adele’s 30, Fleetwood Mac’s perennial Rumours, = by Ed Sheeran and Amy Winehouse’s Back To Black. Big sellers on the format so far this year include Yard Act, Don Broco, The Wombats, David Bowie (the biggest seller on vinyl of the 21st century) and Bastille, as well as continuing sales for Ed Sheeran, ABBA and Adele.
“We expect the growth to continue in 2022, and vinyl will overtake CD to become the most valuable physical format in terms of BPI trade deliveries,” confirmed Wood. “We should have a smoother year and be able to ease some of the backlog, despite capacity constraints still being with us. Constraints often breed creativity, and we’re a creative business.
“We have probably become better at how we allocate stock. Some indies, in particular, have changed their approach by treating catalogue as a short-term new release, taking pre-orders on it and making sure they are covered for stock. Although Record Store Day had to be split last year as some product wasn’t going to be available in time, it was a great success, as was National Album Day. In a more predictable year, we think both will be even more successful in 2022 and we will be doing all we can to support them.”
It’s clear that the CD remains an important format for both consumers and us
While CD may be set to lose its dominance, the format does still appear to have a future. The unit sales decline of 10.5% was not as steep as in previous years, while revenue was down just 3.9%, thanks to premium value box sets.
Music Week reported on a mini CD revival during Q4, thanks to big releases from Adele, ABBA and Ed Sheeran. Ultimately sales were down, but not in double-digits.
Based on BPI data, Q4 2021 CD sales were down 9.9% year-on-year (5.51m units) compared to a 4.4% year-on-year Q4 decline for vinyl LPs (1.86m).
The performance means that labels remain committed to the CD format, and are even exploring new opportunities.
“I think the release schedule in 2021 really helped to support this mini-revival and it’s clear that the CD remains an important format for both consumers and us,” said Walker.
“We will make our music available any way consumers want to consume it - 160,000 people bought 30 [on CD] in its first week of release,” said Wood. “It’s becoming more specialist and fan-based. My feeling is that we probably need to give the format a bit more love and invest in it, just as we have done with vinyl to make it more collectable.”
Subscribers can read the full 2021 market analysis here.