Dust Off Your Vinyl Records. NewsWire

NewsWire: 11/6/21

• Sales of vinyl records continue soaring. The format is selling so well that sales are beginning to outpace manufacturers’ ability to keep up. (The New York Times)
• NH: Vinyl records continue flying off the shelves. In the first half of 2021, Americans bought 17 million records. That’s double the amount sold over the same period in 2020, and it generated $467M in revenue. In contrast, CDs only sold 16M copies and generated $205M in revenue. Not bad for a format that was considered dead back when Michael Jackson was still making hits.
• Much of this rise in sales is coming from Millennials. To them, vinyl provides a more tangible connection to their favorite artists. The pandemic also provided ample time for people to pick up a new collection hobby. (See “Vinyl Records Are Still Spinning.”) 
• Retailers are trying to take advantage of this trend by partnering directly with artists. Walmart (WMT) has deals with singers like Adele, Billie Eilish, and Machine Gun Kelly to sell “exclusive” vinyl copies of their albums. Target (TGT) has done the same with artists like Taylor Swift and Ed Sheeran. 
• The speedy rise in record sales has led to manufacturing bottlenecks. Vinyl production still uses pressing machines, most of which were made in the 1970s. The process is slow, and producers can’t keep up with demand. And polyvinyl chloride, the base material, is suffering some of the same supply-chain slowdowns as so many other industrial commodities. This is not the ideal moment to be moving away from the virtual economy.

Did You Know?

• Pandemic Uptick in Cigarette Sales Fades. If you’re looking for a sign that life is gradually going back to normal, look no further than the latest figures on cigarette sales. After declining steeply for two decades, cigarette sales stopped falling in 2020--but since 2021 began, that decline has resumed. Total cigarette sales fell 6.5% in Q3 2021 compared to the same period a year earlier, a steeper decline in those recorded already in the first and second quarters of the year. For some companies, the latest decline in sales has been even more drastic: Altria, which makes nearly half of the cigarettes sold in the U.S., saw sales drop by nearly 13%. When we initially reported on the bump in cigarette sales (see “Are Cigarettes Coming Back?”), we predicted it wouldn’t last beyond 2020. And that’s indeed what’s happening as consumers spend more time outside their homes and resume spending on things like gas and travel.