Vinyl outsold CDs in the US for the first time in decades

Vinyl saw its fortunes turn in 2021.
Vinyl saw its fortunes turn in 2021.
Image: REUTERS/Heinz-Peter Bader
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If you bought a physical album in 2021, chances are it was vinyl.

For the first time since MRC Data (formerly Nielsen SoundScan) started tracking music sales in 1991, annual sales of vinyl records surpassed those of compact discs (CDs) in the US.

CDs had a good year. Between 2020 and 2021, annual sales increased 1% from 40.2 million to 40.6 million. But vinyl had a very good year as sales rose 51% to 41.7 million in 2021.

The vinyl renaissance, which started in the last decade, is the product of a confluence of factors: nostalgia among older music listeners, a desire to directly support artists after live music venues shut down during the pandemic, and newfound popularity among younger generations.

The vintage medium, which has been enjoying a steady resurgence over the last 10 years, gained steam during the pandemic. Riding a wave of successful releases from Adele, Taylor Swift, and Olivia Rodrigo, vinyl became the top-selling physical music format for the first time since the 1980s.

How music distribution has evolved

Vinyl records have been around since the 1800s. Dating back to Thomas Edison’s invention of the phonograph, the etched discs of polyvinyl chloride plastic became ubiquitous in the early 20th century. Through the mid-1980s, vinyl sales represented the majority of music sales by revenue in the US across every album format, according to data from the Recording Industry Association of America (RIAA).

The cassette tape finally supplanted vinyl in 1984, reigning supreme until CDs took over in 1991. CD sales peaked in 2000 at $13.2 billion with a staggering 92% of the music market. That year, vinyl only brought in about $60 million. The CD maintained its dominance until 2010 when its market share dropped below 50% for the first time, ceding the market to downloadable singles, albums, ringtones, and early music subscription services.

Peer-to-peer music sharing, left uncounted by the RIAA which fought such services over copyright infringement, accelerated the shift from physical to digital during the 2000s via software like Napster, LimeWire, and BitTorrent. By 2019, streaming had taken over. Services like Spotify, YouTube Music, and Apple Music, gained a majority of the music market for the first time—offering paid subscriptions and ad-supported free listening—and in 2020 brought in about $10 billion representing 73% of the market.

Growing appeal for vinyl records

Vinyl sales bottomed out at $26 million in annual sales in 2006. But within a few years, they had shot up past $100 million before climbing to $620 million in 2020, according to the RIAA. CDs sales have shrunk during that time from $3.4 billion in 2010 to $483 million in 2020. (Revenue for vinyl sales outpaced in 2020 because new vinyl records are often two or three times as expensive as their CD counterparts.)

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While 2021 was a good year for both vinyl and CD sales, both were powered in no small part by sales of the English singer Adele’s long-awaited album 30 released in exclusive formats. Amazon only offered an all-white vinyl, Walmart sold just a clear see-through vinyl record, and Target sold a CD with bonus tracks.

Adele sold 1.2 million physical copies of 30, more than double the next biggest seller, Taylor Swift, who sold nearly 500,000 physical copies of Red (Taylor’s Version) in 2021. Across the industry, physical album sales easily surpassed digital sales which fell 23% in 2021. For example, Adele, who also racked up the most digital album sales, moved just 250,000 or so digital copies of her album 30.

All of this suggests something is changing in the music world: physical albums are now the mark of artists’ most devoted fans.

The vast majority of songs are still heard over streaming services. Adele’s 30, released in November 2021, has racked up about 500 million on-demand digital streams since it was released. But streaming a song on Spotify isn’t lucrative for artists who are paid an estimated $0.0035 per stream. To earn a million dollars on Spotify, for example, a song would have to be streamed roughly 3 billion times.

But this renewed appetite for a music technology first developed in the 1800s means that artists now have a new way to reach, and earn revenue, from devoted fans and music lovers. Turntables have become a retro touch in audiophiles’ apartments. And a vinyl purchase signifies the super-fan’s status (and refinement) in a streaming world.

For artists and record labels, vinyl albums now costing $40 a record will be a welcome development.