[ARSCLIST] Tis a strange world

[Karl Miller <lyaa071@xxxxxxxxxxxxxxxxx>]

FYI

Karl

An interesting article from "The Business Online" from the U.K.

Back in the groove

14 May 2006

Technology Editor Tony Glover reports how in the iPod age the record
industry is going forward by returning to the days of vinyl. BESET by
digital piracy and increasing customer reluctance to pay for CDs, the
music industry is fighting back with its latest technology - black vinyl
records.

Music labels and high street retailers are busy turning back the
industry's clock to a time not only before internet song downloads, but
also before CDs or even audio cassettes. The irony is that the vinyl
revolution is being led by teenage consumers who are prepared to stand in
line for the latest 45 rpm single or 331/3rpm LP (long-playing record) in
much the same way that their parents, or in some cases their grandparents,
did.

According to Rob Campkin, the head of Music at Virgin Megastores, vinyl is
now outselling CDs when it comes to the latest records.

"Up to 70% of sales of new releases are vinyl. The fans of popular new
rock bands like Arctic Monkeys and The Raconteurs prefer vinyl to CD,"
said Campkin. "When the Raconteurs' latest single was released, 80% of
high-street sales were for seven-inch vinyl and only 20% were for CDs."

"We are not just talking about vinyl singles but also about albums - the
format is just continuing to grow," said HMV spokesman Gennaro Castaldo.

The trend is born out by figures from record industry body, the British
Phonographic Industry (BPI). According to the BPI's findings, vinyl
records are a technology that has come back from the brink of extinction
to take the industry by storm. Between 2001 and 2005, annual sales of
vinyl single in the UK rose sixfold to over 1m, accounting for 14.7% of
all physical singles sales in 2005, up from 12.2% in 2004. The industry
expects vinyl figures for the current year to be even more dramatic.

The vinyl revolution has caught many of the big music labels napping. It
is the smaller independent labels who have been able to snap up successful
new bands. This has left big players in the industry, such as EMI,
scratching their heads and wondering why teenagers are embracing a
technology the music industry had dismissed as outdated and obsolete
before most of them were born.

Record labels like EMI are finding themselves losing the next generation
of music stars to upstart labels like Domino Records, which handles hit
bands Franz Ferdinand and Arctic Monkeys, and Rough Trade, which handles
The Strokes and rock music's latest human disaster area, Pete Doherty.

According to Virgin's Campkin, the smaller independents have one key
advantage over the larger labels as far as the artists are concerned.

"The independent labels will release material on vinyl where the more
established are more reluctant to do this," said Campkin.

One reason for this situation is believed to be that the mainstream music
industry has forsaken vinyl to the extent that there is now no big vinyl
processing plant in the UK. This means that the discs must be pressed
offshore and that a large number of new vinyl recordings are limited
editions that quickly become collectors' items. This type of operation,
where limited pressings are carried out by factories in other countries,
is better suited to the independent labels than to the more established
players.

Virgin also reports a trend where fans will buy the CD when it is released
and will wait weeks or months until the vinyl release before buying that
as well. Some vinyl albums, such as the last White Stripes release,
continue to sell consistently for months.

In addition to the new releases, retailers Virgin and HMV report a growing
demand for classic pop records on vinyl from artists such as The Rolling
Stones and Bob Dylan. Market research has shown that these new releases of
older material are often being bought by younger customers, just as older
"baby boomers" are increasingly augmenting their collections with LPs from
modern artists such as the White Stripes.

"The original baby boomers, who are now in their fifties, are not only
buying classic pop records by the Beatles or the Stones but are also
adding new artists from the independent labels to their collections,' said
HMV's Castaldo.

According to Virgin's Campkin, one major reason for the renewed popularity
of vinyl is its collectability, which operates on two levels. On one
level, collectability means seeing the value of a 99 pence (E1.43, $1.73)
single CD increases 50-fold in a single year.

"The first 7-inch single release from Arctic Monkeys, which came out a
year ago, is now selling on eBay for 50-60," said Campkin.

He added that the second sort of collectability is the desire to own a
record collection of one's own.

"Vinyl is far more iconic in this respect," said Campkin. "The record
sleeve offers the consumer art work as well as information about the
performers and song lyrics."

Some well-known music figures believe that the industry did itself
irreparable damage when it switched to CDs 20 years ago.

Roger Daltrey, lead singer of 1960s supergroup The Who, said in a recent
interview: "The record labels sold everybody a white elephant with the CD.
They pushed it over as being this wonderful musical formula that you can
play forever that sounds better and is scratch proof. None of it was true;
CDs do not sound as good as vinyl and they last for five minutes."

Like other artists of his generation, Daltrey believes that pop music
generally sounds better on vinyl as so much of it was originally developed
to be played on the vinyl format rather than on digital equipment. Vinyl
enthusiasts say that the bass and vocals on most songs cannot be
accurately reproduced on a compressed digital format and that the music
inevitably loses something by being reduced to what is essentially just a
binary computer code.

Daltrey also believes that record sleeves are a key part of the attraction
of vinyl. "We threw away an art form that was so much more than the
record," said  Daltrey. "The size of the cover was perfect for art work.
Sometimes the covers were more important than the music. The more
fingerprints you got on it, the more it was a part of you. With a CD, you
start with a nice plastic box and end with a scratched plastic box; it has
no character whatsoever."

Campkin said: "I think the record sleeve is paramount. With a vinyl album
you feel you have spent 10-15 on something tangible that will last."

Daltrey also believes that it was the switch to CDs that ultimately led to
the music labels' horrendous problems with digital music piracy.

"The problem with the CD is that if you can copy what is on it for
nothing, as you now can, why would you want to buy it?"

Music retailers such as Virgin and HMV are also coming to the conclusion
that consumers want a return to a more tangible format. They fear that the
logical conclusion to the evolution of digital music is a world without
high street music retailers where fans do everything over the internet and
download all their music via a PC.

Virgin plans to opens a new 25,000 square-foot Virgin Megastore in
Manchester's Arndale shopping centre that it hopes will transform the way
consumers perceive record stores. More space than ever will be dedicated
to vinyl records and customers will have access to turntable and listening
booths in the same way that teenagers did in the 1950s and 1960s. The
store will also offer "chill-out" areas with armchairs and sofas where
customers can relax and listen to music.

Virgin plans to use the same formula in other stores in the hope that it
will be able to persuade teenagers to see the megastores as social venues
as much as music shops. The company hopes that the strategy will enable it
to offer consumers enough added value to head off growing competition from
cut-price supermarket CD offers and internet download services.

The music retailers do not believe that vinyl will ever entirely replace
digital music formats. Instead, they predict that the same fans will often
subscribe to both formats by downloading music for their MP3 players and
PCs but will also wait for the vinyl release to add that to their
permanent record collections.

Virgin believes that digital music downloads may not be as big a
phenomenon as some the industry anticipates and will account for no more
than 10% of the overall market by 2009 and that the appeal of vinyl will
continue to grow to shoppers who want to take home something tangible and
lasting.

Those industry players which do not become part of the vinyl revolution
will see their market share decline as smaller nimbler players snap up the
new artists and establish brand loyalty with an increasingly vinyl-hungry
record buying public.