Have Vinyl Record Sales Peaked?

No doubt, Vinyl has made a long-term comeback from the abyss, growing from an annual 1.2 m units in 2001 to over 4.7 m units in 2022; (source: Luminate). RIAA states the Year-over-Year growth was 61% reaching $1B in revenue for 2021. But will this continue as consumers begin to leave the house to engage in other entertainment activities under the headwinds of inflation and a pending economic slowdown? Having been an analog music fan, I have been following this market very closely and I made some observations over the last few months.

First, I was pleased to see the investments in vinyl manufacturing, improved quality, and the launch of many catalog albums. But these cannot be the only enablers for sustainable market growth in the near term. Second, I do see the Vinyl market continuing to grow, but perhaps at a slower pace than the past 2 years that was fueled by COVID. It will be interesting to see how the vinyl market continues in demand, but also if it’s limited to special/limited releases or dominated by popular new releases and how catalog/re-issues continue.

It is likely, that we will see a more bifurcated market between high-quality records for audiophiles, ~$75 to $150 albums, and the larger pop-driven market by the younger generation where the price/cost pressures will play a larger role in the selection, ~<$25/album. Both markets will serve new releases and catalogs and the margin of the Audiophile albums will be much higher, but the unit TAM (Total Addressable Market) can be expected to decline, given the older generation that dominates that consumption may have changes in preferences in the post-pandemic area.

At this stage, I don’t think we see the record labels get back into the production of records to relieve the production shortage, but they could get into the cutting of the master discs used for the production; it will help them squeeze more costs, provide higher control on the quality of the mastering, and more control of the licensed material.

Ultimately the manufacturers will face real challenges if any significant slack in the overwhelming demand is realized given the new facility investments that have been made, rising variable costs, and ultimately increased retail pricing which will press down on volume. Hopefully, those vinyl factories invested vertically in their supply chain, built up strategic manufacturing advantages for yield and quality, and diversified their customer portfolios that will allow for a flagship margin audiophile product coupled with a volume mid-tier for the masses. Notice I did not say low end, I don’t see that prevailing. The customers of today are buying the packaging and the experience. A thin floppy record with low-cost packaging will struggle since that look and feel plays a big part in the decision to buy coupled of course with the artist’s image.

If the demand does not blink in 2022 and 2023, and no new capacity is brought in, then the vinyl manufacturers face a continuation of 12-month delays in backlog production. This may serve a few of the labels and artists but not the many that are waiting to include their fans and will motivate other solutions to serve that demand. Vinyl availability should not determine a new album release date. In the current environment, it is tough to invest in more production, given the risks unless those vinyl production profits were put to good use.

This year will be interesting as we move through the summer and towards the holiday season of 2022. It will be a litmus test for the return of Vinyl. Stabilizing the vinyl market in both demand and supply will play a bigger role as this come-back story plays out in a digitally dominated world.

An old HMV ad. Source: us.archive.org

The vinyl manufacturers can perhaps focus on providing audiophile quality at mass-market costs/prices, perhaps adopting some manufacturing techniques from semi-conductor brands, (more on this in my previous blog) It can help differentiate their products and services to the labels/artists and future-proof the consumers purchases as they upgrade their listening systems over the years to come. It can also help grow the consumption market and keep it sticky, so they return for decades and not just a few years, and allow the vinyl market to grow out of its niche existence. Finally, vinyl manufacturers can seriously start looking at some advertising and marketing to drive loyalty and sales with the existing and the new fan base by mixing nostalgia with lifestyle. Vinyl manufacturers and the surrounding industry now play a key role in the future of vinyl and are at crucial juncture of overturning the pages in history, if executed well.

An appreciation for vintage audio equipment

Vintage audio is known for its warm sound, which can be attributed to the vacuum tubes and components used in amplifiers and preamplifiers . Also known as valves, vacuum tubes are what make vintage audio so popular today. If you are drawn to history, it's rich with how the audio has evolved over the decades and the history of devices, designs, companies, formats and, of course, the people that made it happen. An educational appreciation if you're so inclined, but with practical use allowing you to leverage excellent vintage gear that in many cases can still outperform new-age systems.

Furthermore, high-end vintage equipment holds its value and often goes up while providing outstanding performance for the price. A vintage system or components are a great start where if you make mistakes, you can recover your investment. And the value furthermore allows for additional investments in power, cable, DACs, speakers and other items that need to be, in my opinion, a little newer and not so vintage. Collecting, refurbishing, and reselling vintage equipment and components like tubes and capacitors can also provide additional money to fund your stereo expansions and improvements. In summary, vintage equipment can be a bargain value for performance, protect and, in some cases, improve your investment and not eat up the entire system budget. Did I forget to mention that the retro look of a vintage system and or cabinet can also be a significant value add depending on the room decor?

I have enjoyed the history of the McIntosh and pressing the entire system's performance. The heart and soul are based on 1960s technology and design with the Macintosh MC275 and C22, both with tubes and no solid-state technology point to point wiring.

The performance value was great when I started and allowed me to try several types and sell what I did not want with no loss. It also gave me flexibility in buying some of the more modern surrounding pieces that would be better given age or technology improvements like speakers, cables, and power management. The vintage equipment also taught me the impact the right designs, capacitors, resistors, tube selection, and measurement had on the sonic signature.

Vacuum tube collection and rolling with tubes from the 50s and 60s requires understanding the tube design in detail, like the length of the plates, shape and positioning of the getters. And the expected current and end of life mutual conductance parameters and ultimately where they were manufactured. For example, I can tell you the best Telefunken tubes with the "S" extension, which indicated lower microphonics and best performance for medical and military applications, came from the Telefunken factory located in Ulm, Germany in the 50s and 60s. The Amperex Bugle Boy tubes, known as the 12AX7, U.S. numbering, came from the factory in Heerlen, Holland. And the RCA long black plate 12BH7 was another key tube in my system manufactured in the USA at that same time. Trial and error is one way to figure this out, but connecting with the global audiophile community that has already experienced a variety of tubes will shorten your path to finding the right combination.

Vintage audio can also have an exciting history. Case in point, how McIntosh successfully attracted customers through 'McIntosh Audio Clinics' starting in 1961 in New York via their dealer networks, where customers could bring in any amp and McIntosh engineers would provide free testing, fixes and of course, new tubes. It was a clever idea to drive the customer to the store where a deeper appreciation of the quality and design could be communicated, ultimately making McIntosh a premier brand with a large following that still exists today. You can read more about this here.

Some of the amps and preamps I have purchased had one owner with original "McIntosh Amplifier Clinic" measurements and notes from McIntosh; that is far more interesting than just the original owner's manual.

McIntosh Amplifier Test Clinic 1972

McIntosh Amplifier Test Clinic 1972

McIntosh Amplifier Test Clinic 1973

McIntosh Amplifier Test Clinic 1974

McIntosh Amplifier Test Clinic 1975

McIntosh Amplifier Test Clinic 1976

This unique history and more can be found at the late Roger Russel's website and also here

If you are interested in what seems to be an almost complete history of McIntosh vintage equipment by date and specs, this is an excellent reference .

What we have known about audio was mostly known already back in the 50s and 60s. In fact, 1950s saw commercial and personal acceptance of audio. The term 'audiophile' was introduced by then launched High Fidelity magazine. The evolution continued well into 60s and 70s. The 80s then saw increased demand and what changed was material science and the budgets that allowed for higher-end

designs and of course, digital sources. Digital has benefited the most, which now rivals analog and, in some selections, has surpassed it; yes, I said that. But the combinations of the equipment and the source material production can vary so much that's where you find the inconsistencies and the endless debates of Reel to Reel vs. Vinyl vs. Digital. Ultimately this is the real challenge in understanding the performance of your system. A strong dealer, club, or just friends and repair shops can be a big help in this regard. I had many friends/dealers in Tokyo, Korea, Taiwan, Australia, the USA and Western Europe to leverage. But as I moved to the newer technologies for the Amps/preamps, I looked for a deeper appreciation from the Stereo Shoppe in Boise, Idaho, Audio Salon in Santa Monica, and Alma Music & Audio in San Diego. This experience has been very helpful. Fabio with Alma has good insight into what works with what; the pairing discussion and understands where I am coming from regarding the vintage system and what would change. All 3 of these dealers understand the combinations possible and resulting changes to expect; the dealer is invaluable, as are the component suppliers. This will save time in your journey and provide a roadmap to where you want to drive your system to be enabled by their knowledge and accurate A/B comparisons with actual demo units in your system, in your room, with your content.

I will continue with the state of the art equipment but will also run in parallel with the vintage; I enjoy the history and the value continues to move in the right direction, albeit you must have the desire to continue the maintenance, which can often unexpectedly show up right after you sit down to listen and within the first 3 minutes you detect something is off and your testing tubes and digging through your tube inventory and checking cables and fuses…. 😊

#vinyl #McIntosh #TheAmplifierTestClinics #Telefunken

A new listening journey with Nagra HD Preamplifier.

The vintage Macintosh C22, although legendary, was a suspect in limiting performance when paired with the Reference 160M’s. It exhibited actual limits that could be heard or not heard by the revolving nature of the 160M’s; enter the Nagra HD Preamplifier. The Nagra is a heavyweight contender regarding Preamps and an unfair comparison. Still, I needed to see how far we could push the system and free up additional performance paired with the Reference 160M’s.

For 30 days, I was able to evaluate a demo unit from Alma Audio and in that period, ran through what seemed to be endless tests, including making adjustments to the room and speakers. The balance and precision of the Nagra made me think I had a speaker driver issue. After testing the speaker drivers and room acoustics, the obvious solution was to move the speakers, seating and room acoustic treatments. The speakers and the room were set to the C22, which did not have the same perfected balance of the left and right channels and required adjustments; I did not see that coming and tore everything else apart first.

A new Nagra HD Preamp now sits in the system, replacing the vintage Mcintosh C22. Pulling the C22 out of the primary system was not enjoyable; I learned a lot from that component and was a big part of the original system developed while living overseas. But the maintenance like the vintage MC275 is eternal and the performance gains are impossible to ignore. The vintage system will be re-setup in another location so it does not disappear and I will definitely not sell it off. It stays and will find a different floor to perform on. After all, that vintage system reached performances not expected by many audiophiles globally and audio reviewers; it will RETURN.

As for the Nagra, it is stunningly transparent as if it is not there in the system. Sure it has tubes, which I prefer, but it does not colour the sounds as one may expect. However, it does provide outstanding contrast, imaging, and sound stage, far more than the C22 was capable of. The digital source materials made it evident that backup singers were more identifiable in position and clarity. As for vinyl, the performance again showed the same improvements as the digital sources but superior regarding less typical TT noise and background interference from a vintage C22. Sure, the PS Audio Stellar Phono preamp played a role by replacing the SUT from Bob’s Devices. I will come back to write about testing the SUT from Bob’s Devices and other Phono preamplifiers shortly.

New system setup with Nagra HD preamp

For the final review, I reached back to some of my earlier reference records like Songbird by Eva Cassidy, Chuck Mangione's Children of Sanchez, Graciela Susana Adoro, Eric Clapton's Unplugged, and the list goes on with all improved in performance with one surprise. There always seemed to be some distortion in the ending crescendo of the Children of Sanchez Overture. I always thought that was in the recording or mastering of the piece because you can often find poor mastering of an album with an excellent resolving system. It was not the recording or the mastering because it was gone with the Nagra; a pleasant surprise. I should also mention the new pressing of 30 by Adele was hair raising; thank you, @Adele. A very relaxing and smooth soulful release highlighted by real musical talent by Lis Wessberg playing the Trombone on the Yellow Map album. I would like to see Bernie Grundman cut one of her vinyl albums in the future where her talent is more exposed; thank you, Lis. And Anette Askvik with the Liberty Album and track that gently demonstrates great detail and vocalists, including the backup singer on her left shoulder; it is simply awesome.

I may be exaggerating here, but each listening session with Nagra HD Preamplifier has been like a ceremony that is magical and pure. I will share more experiences on this and other phono preamplifiers in my next blog.

Music brings magic into our life, not just ears.

#NagraHDPreamplifier #MC275