The music industry, like other business sectors, runs in cycles. Once almost extinct, vinyl sales have made a dramatic come back, hitting an 18 year high. In fact, vinyl sales have grown faster than any other format in recent years with 11.92 MM units sold in 2015 (up 30% from2014). Marketing data has shown that vinyl sales contributed more to the music industry than Spotify Free, YouTube, and VEVO combined. Plus, it’s not just older audiophiles adding to their collections. Half of vinyl buyers are millennials under the age of 25.
Stepping into this arena, on-demand crowdfunding platform Qrates is looking to reposition vinyl from a nostalgic and vintage recording item to something actually embedded into the future of music. Artists, labels, and brands can access Qrates on-line tools to design, fund, press, sell, fulfill, and distribute their vinyl worldwide. “The music industry is focused on digital on demand,” explained Qrates Chief Marketing Officer Taishi Fukiyama. “We’d like to introduce analog on-demand vinyl.”
The Japanese company has successfully blended crowdfunding, on-demand, and analog principles to revolutionize the traditional logistics of vinyl marketing. Artists and labels were hesitant to commit to the expense of pressing thousands of vinyl units and developing the distribution and fulfillment chain needed for a new release with no guarantee of recouping their investment. This is especially true when competing against digital releases which have little to no production costs. Through Qrates’ on-line design and ordering system, artists can choose from a variety of design options ranging from vinyl thickness and color to multi colored album art to put their artistic stamp on their project. With the crowdfunding component, projects can be based on production runs as few as 100 units with no financial risk to the artist or label. Once a crowdfunding project is initiated by the artist, Qrate offers it for sale in its on-line store. They can also add it to their wholesale catalogue. Independent record stores accounted for 45% of vinyl sales in 2015. Qrates has already signed up a global network of 200 stores including Juno (UK), HMV Records, Technique, FatBeats, and Jet Set in Japan. Record stores are able to buy and help fund vinyl releases, have them pressed, and delivered right to the store. Qrate plans to have over 1,000 record stores signed up by the end of 2016. This adds to the attraction of the Qrates model for DIY artists. An artist can initiate a crowdfunding campaign and presell 45 units. Record stores can order another 23 units for delivery directly to their door. The artists can purchase 32 units to take on tour for merch sales, thus fulfilling the 100 unit production minimum.
With Qrates, DIY artists who shied away from pressing vinyl because of the complexity and the cost are now taking a closer look at potential projects. Chris Harris, guitarist for the Chicago-based indie blues/rock band, One Season, says, “We looked at doing vinyl in the past but it was pretty complicated to make as well as costly. I like that Qrates has combined crowdfunding with on-demand vinyl. This is something we will definitely take a closer look at for our next recording project scheduled to drop in early 2017.”
The digital revolution, on-line streaming, and crowdfunding will continue to impact the music industry for some time to come. But if Fukiyama and Qrates have their say, a decades old recording format will continue to be a major player in the industry. To learn more about Qrates, visit www.qrates.com.