Originally posted on CNBC
The entertainment industry always loves a good comeback story, and music’s latest resurgence is no exception. Despite an explosion in digital and streaming music — including Spotify, Apple Music, Pandora and Tidal — consumers are spending more money on vinyl records, and more vinyl buyers are millennials.
In 2014, more than 13 million vinyl long-playing albums, or LPs for short, were sold in America. And the first half of 2015 is showing similar sales strength with more than 9 million LPs sold, according to the Recording Industry Association of America.
The association says the last time it has seen such high LP sales was a quarter century ago, in 1989. At that time, nearly 35 million LPs were sold. Then in 1990, compact disc sales took off, and vinyl sales fell by the wayside.
The current surge in LP sales is partly being driven by younger consumers. Industry researcher MusicWatch reports half of vinyl record buyers are under 25, and men are more likely to buy LPs than are women.
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“It’s definitely a bright spot for the business,” RIAA’s Josh Friedlander said in a statement to CNBC. “In an increasingly digital age, vinyl records can provide a deeper, tactile connection to music that resonates with some of the biggest fans,” said Friedlander, the association’s senior vice president of strategic data analysis.
LP shipments increased 52 percent to $222 million for the first half of 2015, according to the association. But that’s still only 7 percent of the overall market by value in a music industry dominated by digital and streaming sales.
The vinyl demand is driving production at Independent Record Pressing in Bordentown, New Jersey. The plant opened about 10 months ago and just launched production in the past few weeks. The company wants to make more than a million records per year.
Adding to the overall spike in vinyl demand, the New Jersey location is among only a handful of U.S. plants still making LPs.
“Our demand far exceeds that,” General Manager Sean Rutkowski said. “We could run these presses 24 hours a day, seven days a week and still not be able to meet demand. Capacity is really the choke point in the vinyl industry right now,” said Rutkowski, a music industry veteran of some 20 years.
Independent Record Pressing has contracted with about half a dozen independent labels and has four full-time employees.
Music files vs. tangible LP
The plant machines are some 40 years old, and have been refurbished by Dave Miller, the plant manager. Miller said the technology hasn’t changed much at all in that time. Each record takes about 25 to 40 seconds to make. The process includes molding and heating vinyl up to 350 degrees and hitting it with about 100 tons of pressure on the press. Each record is then listened to individually before being packaged and shipped.
“It’s still heat and compression,” Miller said. “Digital timers and things like that have come into play, but really nothing has changed.”
The equipment’s age, however, can sometimes be problematic. “When stuff breaks you have to either redesign it and have it reworked or remanufactured,” Miller said.
And while vinyl may be the contrary to digital, Rutkowski said digital music may be adding to interest in LPs.
“Digital strips out the tangibility of music. It really is just a file, and a record is such a great tangible piece. It’s something you can hold, something you can touch, something you can listen to in a way that just putting something on your computer doesn’t [compare to],” Rutkowski said.
“I think a lot of younger kids are just discovering vinyl. They were yearning for something different, and it’s sort of a badge of what they listen to.”