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Vinyl remains officially the least popular way to listen to music albums in the UK

anmpr1

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#2
With an almost 30% decline in sales, CD may not be dead, but it's starting to smell a little funny.

The author claims that plastic records are 'a more profitable' product than CDs (and presumably downloads). That would surprise me. Perhaps at the retail level, but from the record company? How can a plastic record be more profitable than a CD to produce, even if the record is selling at a premium? The cost to produce a CD has to be next to nothing compared with pressing a record.

I'm not in the industry, so it's just my first thought. If cost of production (pressing, packaging, shipping and so forth) is a major part of retail cost, then downloads should cost next to nothing for the consumer. I've always wondered about the profit on downloads.
 

Robin L

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#3
"If CDs outsell vinyl massively – which they do – then why is the format being ignored and treated like some kind of black sheep of the physical format family?"

Because CDs can be ripped, there's a near infinite ability to copy digital files. LPs require careful handling, are far more difficult to copy, have bigger margins because LPs are usually more expensive than the digital equivalent. LPs are better for brick & mortar retailers, even the sound of browsing the bins is better than the clack of jewel cases. But when all is said and done, music really does want to be free, digital distribution makes acquiring music far less expensive, particularly streaming. Remember that the biggest distributor of music online is YouTube. Although there's money in streaming, it's nowhere as much a margin per album as LPs.

One more thing, most used CD stores have easy return policies. One can rip the CD one day, return it the next and get a 75% refund, applicable to the next purchase/de-facto rental.
 

anmpr1

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#5
LPs require careful handling, are far more difficult to copy, have bigger margins... /QUOTE]
When you were working at the record store, do you know the gross margin (before expenses) on a record? My guess would be half of retail to consumer, but I don't know
 

xr100

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#6
4.3m units? I'm very surprised it's that many. I suppose if the market tends towards those who buy a high number of units per year, then it makes some more sense. Otherwise, it implies a curiously high number of people buying vinyl and playing it on some plastic "USB turntable" or similar junk!

(Would be interesting to know the percentage of sales which are effectively "merch only," collected and/or displayed, but never played.)

As for CDs, why on Earth would anyone want to use them anymore?
 

Robin L

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#7
When you were working at the record store, do you know the gross margin (before expenses) on a record? My guess would be half of retail to consumer, but I don't know
More like 40%, you were close. Big Box stores usually had a thinner margin. Borders, Wherehouse, Tower. Loss leaders sometimes went for cost. Don't see loss leaders like I used to. Not to mention promos, which effectively drove down margins as most wound up in used shops. Little stores often have to deal with one-stops, mean they paid more than the big stores. One little store I worked at invested a lot of money so they could deal direct with the record companies, like BMG and Sony. That store also has a cafe that's very well run, probably more of a money maker than the CD side of the shop.
 

Robin L

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#8
4.3m units? I'm very surprised it's that many. I suppose if the market tends towards those who buy a high number of units per year, then it makes some more sense. Otherwise, it implies a curiously high number of people buying vinyl and playing it on some plastic "USB turntable" or similar junk!

(Would be interesting to know the percentage of sales which are effectively "merch only," collected and/or displayed, but never played.)

As for CDs, why on Earth would anyone want to use them anymore?
For ripping and playing back on DAPs. After that? Just like any other collection/hoarding activity. And some CD packages are plenty collectible.
 

xr100

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#9
For ripping and playing back on DAPs. After that? Just like any other collection/hoarding activity. And some CD packages are plenty collectible.
Indeed, that's what I meant by "use" -- actually putting them in a CD player (or optical drive) for playback. :)

I've learnt my lesson with "hoarding" of physical objects. It just becomes a very big space hog, nuisance and if stored somewhere in back of the loft it never gets seen anyway. "Digitally hoard" as much as you like with terabytes of storage!

I will confess to taking photos of objects that I have to "force" myself to throw out--that includes a lot of old electronics. The "digitally hoarded" photos are never looked at again.

A friend of mine has a large collection of Sinatra material from expensive box-sets to old 78's, all in display cabinets. Wonderful for him but that's just not my idea of good (minimalist!) decor. I don't think he'd ever want to sell it so its resale value is pretty irrelevant.
 

xr100

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#10
More like 40%, you were close. Big Box stores usually had a thinner margin. Borders, Wherehouse, Tower.
Tower had a long term presence in the UK but only ever opened a handful of stores, and the ones they did open tended to be in high-cost locations, above all the flagship site at Piccadilly Circus--they never opened in "retail parks" (as we in the UK call strip malls.)

Borders embarked on an international expansion programme just around the time Amazon had started its exorable march towards domination. They opened a number of sites in the UK including "big box" stores. I don't think their prices for CD's were as absurd as Tower (off the top of my head, non-discounted records at Tower were typically around 30% more expensive than elsewhere?) but they generally weren't very competitive either.

So, I'm somewhat surprised that you say Borders and Tower were operating on "thinner" margins in the US. I have visited their stores in the US but I cannot remember pricing.
 

Robin L

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#12
If a CD came in a larger package, the size of an LP, so I could display it, I'd buy more CDs.
True. The record companies missed out on making a 12" disc when they cooked up high-res formats. Like a Laserdisc for sound. Note, however, part of the point [at the time] was coming up with a format that would be SOTA [or at least make claim] but also be playable in the car. Not that I've ever seen an in car SACD player.
 

Robin L

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#13
Tower had a long term presence in the UK but only ever opened a handful of stores, and the ones they did open tended to be in high-cost locations, above all the flagship site at Piccadilly Circus--they never opened in "retail parks" (as we in the UK call strip malls.)

Borders embarked on an international expansion programme just around the time Amazon had started its exorable march towards domination. They opened a number of sites in the UK including "big box" stores. I don't think their prices for CD's were as absurd as Tower (off the top of my head, non-discounted records at Tower were typically around 30% more expensive than elsewhere?) but they generally weren't very competitive either.

So, I'm somewhat surprised that you say Borders and Tower were operating on "thinner" margins in the US. I have visited their stores in the US but I cannot remember pricing.
Plenty of loss leaders—was $18.99 [40%] now $12.99 [not much at all] in the new release bins, back catalog sales that were lable specific, some of the price cut from the record company, some from the store.
 
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Tks

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#14
If a CD came in a larger package, the size of an LP, so I could display it, I'd buy more CDs.
I don't mind their size. It's just the packaging is sometimes trash, and very little focus on artwork and extras inside (like about the music itself in a nicely designed graphics artists' rendering).
 

xr100

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#15
True. The record companies missed out on making a 12" disc when they cooked up high-res formats. Like a Laserdisc for sound. Note, however, part of the point [at the time] was coming up with a format that would be SOTA [or at least make claim] but also be playable in the car. Not that I've ever seen an in car SACD player.
I suppose that would make it a good "merch" format today.

SACD very much feels like a product of "pre-Internet" thinking. I imagine the idea, particularly with "hybrid" SACDs that had a "CD" layer, was for the world to transition over a period of time to SACD, with the marginal costs of adding SACD capability to mass-market consumer products being negligible... but royalties due to Sony/Philips would be non-negligible, and the record companies could have a bonanza through the sale of repackaged content, as they did with CD. I suppose, too, the manufacture of "hybrid" discs may have posed difficulities for the duplication facilities of pirates.

Pretty much around the time SACD had really launched, though, I already had a 2Mbit/s cable modem connection at home, and the release of the Windows version of iTunes was around the corner...

As for in-car SACD players, never heard of such a beast... but Google has. :)

https://www.stereophile.com/content/sacd-dvd-audio-dvd-car-two-sony-players-1
 
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scott wurcer

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#18
(Would be interesting to know the percentage of sales which are effectively "merch only," collected and/or displayed, but never played.)
I've seen estimates of 40% or so are only as a tchotchke. The horribly wobbling maglev turntable is featured here in a TV commercial for posh gifts, I don't get it.
 

Robin L

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#19
I don't mind their size. It's just the packaging is sometimes trash, and very little focus on artwork and extras inside (like about the music itself in a nicely designed graphics artists' rendering).
Again, good graphics require a larger format, 12" x 12" being a particularly good size.
 

xr100

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#20
I've seen estimates of 40% or so are only as a tchotchke. The horribly wobbling maglev turntable is featured here in a TV commercial for posh gifts, I don't get it.
Interesting, that figures. As for the maglev turntable, I had to Google, and it surely looks like the sort of thing that would be of interest as a display piece/talking point for high disposable income pseudo-cognoscenti. ;-)
 
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