A stack of freshly pressed gold vinyl records at United Record Pressing.
CNBC
This story is an element of CNBC’s latest quarterly Cities of Success series, which explores cities which have been transformed into business hubs with an entrepreneurial spirit that has attracted capital, corporations and employees.
Once considered a dying industry, the vinyl record business has undergone a remarkable multibillion-dollar resurgence in the past decade. It has been fueled by popular artists comparable to Taylor Swift and major retailers including Goal and Walmart, together with a growing wave of consumers rekindling their love for the nostalgic format during the Covid pandemic.
“Never in one million years did I feel it might, as a market and as an industry, turn out to be what it’s turn out to be today,” Mark Michaels, CEO and chairman of United Record Pressing, the largest vinyl recording pressing plant in North America, told CNBC’s Andrea Day in the upcoming primetime special “Cities of Success,” which airs Dec. 6 at 10 p.m. ET.
United Record Pressing CEO Mark Michaels inspecting a vinyl record.
CNBC
The worldwide vinyl record market was valued at $1.98 billion in 2022 and is projected to succeed in $4.12 billion by 2030, in line with Verified Market Research. Greater than 41 million vinyl albums were sold in the U.S. last 12 months — the highest number since 1988, in line with the Recording Industry Association of America.
United Record Pressing has turn out to be a serious player in the vinyl market, producing roughly 40,000 records every day at its Nashville, Tennessee, facility. Founded in 1949 as Southern Plastics, the company has a wealthy history of manufacturing vinyl records for iconic artists, including The Beatles, Stevie Wonder, Michael Jackson, Adele and Jack White.
But the company was facing an uncertain future 16 years ago when Michaels acquired it.
Second wind
The vinyl record industry had been in decline for several many years resulting from the emergence of more convenient physical formats comparable to cassette tapes and CDs, a decrease in the quality of vinyl records resulting from lower-quality materials and processes, and the rise of digital music, comparable to MP3s and online streaming.
Vinyl record sales plummeted in the Nineteen Eighties and Nineteen Nineties. And by the early 2000s, the industry was on the verge of extinction: In 2006, just one million vinyl records were sold in the U.S., in line with RIAA.
“I questioned what I did all the time,” Michaels recounted after acquiring the company. “I had many sleepless nights. [Even] my family questioned what I had done.”
But in the years that followed, Michaels said, he noticed a promising trend: Indie artists displayed a growing interest in vinyl.
Hoping to position United Record Pressing as the go-to pressing plant for those artists and music producers who valued the tangible vinyl experience, Michaels purchased old record presses from closed plants to accommodate potential growth.
“Prior to 2016, you needed to give you the option to search out and restore an old record press, and that was an actual tough, tough search,” Michaels said.
The demand for vinyl from each indie and mainstream artists soon led to reissues and coloured variants, marking a turning point, in line with Michaels. That growth gained further momentum with the entry of major retailers comparable to Goal and Walmart into the vinyl market in the early 2010s.
Mainstream lift
When Goal and Walmart, two of the largest retailers in North America, decided to stock vinyl the entire supply chain was significantly affected, in line with Michaels.
Vinyl began reaching a wider market segment: consumers who may not have traditionally shopped in independent record stores but were keen on acquiring mainstream vinyl titles.
“We recognized that with all the old presses that we had acquired, and we built the company around, that was inadequate to give you the option to service the needs of where the market was going,” Michaels said. “Conveniently, in kind of 2016, a few corporations began manufacturing latest record presses.”
Soon after, United Record Pressing implemented a growth strategy, relocating to a bigger facility in 2017. The corporate established a creative marketing team that engaged with artists and labels, conceptualizing unique vinyl ideas comparable to liquid-filled, split-colored and scented records.
The corporate also included a digital download coupon with each record and initiated a record label, recording artists on tape and pressing on to vinyl.
Michaels said the company also orchestrated a grassroots public relations campaign to spotlight its 60-year history as the premier vinyl pressing plant in North America.
United Record Pressing’s expansion space.
CNBC
The brand new space, spanning 155,000 square feet in Nashville, not only met present requirements but additionally positioned the company for future growth — which might come just a couple of years later when the Covid pandemic provided a further boost to the industry as people reengaged with the nostalgic format.
Today, the medium reigns as the hottest physical music format in the U.S., representing 72% of all physical music sales, ahead of CDs and cassettes, in line with mid-2023 data — the most up-to-date information available from the RIAA.
In accordance with Billboard, the average price of a vinyl record increased from $26.12 in 2021 to $29.65 in 2022, reflecting heightened production costs and the impact of inflation.
As well as, the landscape of vinyl retailers has evolved over time. Indie record stores led the market in 2015 with 45.4% of sales, Billboard reported, followed by web or mail-order sellers comparable to Amazon at 32.9%, and chain stores comparable to Best Buy at 15%.
By 2018, Amazon had eaten into indie stores’ dominance, with each categories representing 41% of market share, while Best Buy’s share had decreased to simply over 10%. And by 2019, major retailers comparable to Walmart and Goal were registering on the scene.
Where big-box retailers made up just one% of vinyl record market share in 2015, they accounted for 14.6% of sales in 2021, in line with Billboard.
Artist-driven
Michaels told CNBC he’s confident that the market’s continued growth might be artist-driven. That plus a general shift in interest, as younger listeners discover vinyl, suggest the medium is here to remain, he said.
Artists comparable to Taylor Swift offer collectible versions of their albums, called “variants,” that are multicolored vinyl records.
Most of recording artist Taylor Swift’s catalog, including her album “Red,” has been pressed at United Record Pressing.
CNBC
“When Taylor releases a latest record, there could also be eight, nine, 10, different variants of that very same record — different colours, different combos, possibly there’s some unique tracks that weren’t included on the digital release, or the CD, but you get it on the vinyl,” Michaels explained. “There’s quite a lot of fans that say, ‘There are eight different variants. I would like certainly one of each, please.’ They’re very supportive.”
The CEO attributes a portion of his company’s success to the city of Nashville, too, praising its deep-rooted connection to music and the creative industry, which has provided a dedicated and expert workforce.
“You’ve the whole musical ecosystem here,” he said. “You’ve artists, producers, studios — all of it works together in a highly symbiotic way. It’s the perfect place, and we’re very fortunate to be here.”
TUNE IN: The “Cities of Success” special featuring Nashville will air on CNBC on Dec. 6 at 10 p.m. ET/PT.
Correction: A photograph caption on this story has been updated to correct that almost all of Taylor Swift’s catalog has been pressed at United Record Pressing.