If A Vinyl Record Store Doesn’t Report Sales, Does It Even Exist?
In 2022 vinyl records surpassed CD sales for the first time in 30 years, showing the remarkable new life for a format that was given up for dead at one point. Vinyl sales continue to grow and have become a major revenue source for artists and labels alike, but new changes to how the sales are tallied could put a crimp in the impressive sales numbers that we’re seeing.
Luminate, the company that counts music consumption for the Billboard charts, recently stated that it will soon count physical sales (vinyl, CDs and cassettes) much differently, which has both the Vinyl Record Manufacturing Association (VRMA) and the Vinyl Alliance up in arms.
It’s The Algorithm
The way Luminate determines sales currently is by polling about 5% of record stores, then using an algorithm to extrapolate what the sales might be when all stores are combined. That’s certainly not ideal in that it’s only providing ballpark numbers in the end, but its new way of counting might be worse.
Soon Luminate will only count the sales that are directly reported by less than 5% of record stores in the U.S. and Canada that have agreed to do so.
While this might be a more accurate number, it does only represent a small portion of the overall market. The Vinyl Alliance estimates that it will reduce the perceived market size of vinyl by at least 40%.
It’s The Perception
Why is this such a big deal? In business, sometimes perception is everything. If the market seems small, then the investment in new pressing plants and support infrastructure will be less because the real size of the market is being under-reported.
If retailers see the perceived market of vinyl is low, or that a hit title looks like it’s not selling that much, they will reduce their ordering, causing the whole vinyl industry to shrink.
It’s amazing how a decision can have unintended consequences sometimes and this might be a prime example. The vinyl industry is now going gangbusters, with so much enthusiasm from all participants. It would be shame to stifle it now. You’d think with all the technology that Luminate has at its fingertips that it would put it to use, rather than going back to the way things were done in the 1960s.
