Two future paths for the vinyl revival

The vinyl resurgence is among the top music industry narratives of the past few years, especially given the recent focus on monetising fandom. The elephant in the room is the question of how long this resurgence will last. Indeed, MIDiA’s latest report, “Music merchandise demand | Who, what, and where” forecasts declining global physical music sales after 2026, following four years of gains. But this does not mean vinyl will merely be boom-and-bust. The vinyl revival is a symptom of consumer behaviour, not the cause.

Fandom versus consumption

The vinyl revival has been driven by younger consumers, many of whom are purchasing CDs and vinyl less as consumption products and more as collectible keepsakes to represent and express their fandom. According to MIDiA’s Q2 2024 Consumer Survey, 19% of 16-19-year-olds in the US bought a vinyl record to support their favourite artist in the last year. Of all US consumers who did so, 62% have access to a record player in their home — leaving over one third who may be buying without ever expecting to listen.

When vinyl is packaged as a fan collectible, rather than a consumption format, it can command higher prices. This has prompted artists to sell multiple editions, like Taylor Swift’s “clock” set made up of four versions of her Midnights vinyl, which cost upwards of $150. The vinyl revival has been particularly advantageous to record labels and publishers, with a greater cut of revenue going to these rightsholders than is typically the case for physical merchandise like t-shirts.

Challenges to servicing demand

However, Swift is one of a small group of superstars who can access and afford vinyl production at scale. Because the format was long left for dead, the complex, delicate vinyl production process has not meaningfully evolved in decades and there are a limited number of both pressing plants and remaining experts in the field. On top of that are environmental concerns.  

Steve Rhodes is among the entrepreneurs focused on innovating the sector with his vinyl-on-demand company elasticStage, which claims to have invented a simpler, cheaper, and environmentally-friendly way to produce vinyl. It is far from the only company aimed at better serving vinyl demand. Bandcamp opened its vinyl pressing service to all artists in 2021, and in an ironic turn, digital distribution company Stem partnered with AMPED in April to bring physical distro back into the picture (per HITS Daily Double). 

Despite these welcome shifts, the overall physical music market will hit a peak in 2026, according to MIDiA’s report. Part of the reason is that the fandom-driven revival of physical music will not be enough to offset its decline as a consumption format. Regions where CDs are still a popular mode of consumption, like Japan, are steadily transitioning to streaming. Physical music sales currently stem from a combination of consumption-driven and fandom-driven purchasing; with the former declining faster than the latter can grow. So where does vinyl go from here?

Focus on root causes, not symptoms

Instead of focusing on the symptom (vinyl purchases), focus on what is driving this behaviour: an underlying consumer need for ownership and connection to the music and artists they love.

These needs are not going away, but perhaps vinyl is not the only product which could serve them. There will always be die-hard vinyl collectors, but there is an argument to be made that if close to one-third of fans are purchasing vinyl for reasons that do not include listening, then perhaps less time should be spent improving vinyl production and audio quality, and more should be spent figuring out what (higher-margin) items could serve the same consumer needs. Think framed album covers, lyric books — or something entirely new. Two startups in this space are KiTbetter, which borrows from K-pop to produce physical album packages complete with keychains, photocards, and other items; and Totem, which creates bespoke, sculpture-like collectibles tied to artist albums. For both companies, the physical object is linked to a digital playback experience. In this future path, vinyl demand gives way to a suite of new fandom products with the same aim of giving fans a tangible connection to the albums they love. 

However, there is another potential scenario in which vinyl leans back into consumption. Not without irony, physical music could become the premium listening alternative to streaming — the higher-audio-quality, more engaged listening experience for true fans and audiophiles. Artists could encourage this behaviour by releasing albums to vinyl first, before they are released to streaming services. This would bring much-needed scarcity back into the music market and new music rights-based revenue for both artists and labels / publishers. 

Put this way, the vinyl revival is just the starting point for better understanding, and serving, the needs of today’s music listeners and fans. Ideally, the industry can attack the solution from both ends: continuing to provide value to vinyl listeners by turning it into the premium, early listening format, while also using vinyl as a launchpad for developing new products that cater to artist and album fandom.

For more information on the outlook for physical music, including global revenue forecasts through 2031, clients can access the full report “Music merchandise demand: Who, what, and where.” If you are not a client but would like to find out how you can access the report, please reach out to enquiries@midiaresearch.com.