What Does Better Financially: Vinyl or Streaming?

Vinyl may forevermore occupy a tiny slice of the music market, but as of this moment, old-school records generate more money for the industry than Spotify (the free version), YouTube and VEVO combined. The raw numbers from the RIAA’s mid-year report of US record sales give vinyl the edge, $222 million to $163 million.  That’s pretty impressive–at least one the surface.

If you’ve been shopping for new vinyl lately, you’ll know that it’s rare to find anything for sale under $20 CAD. Chances are you’re paying closer to $30 or even $40 depending the the release. (My copy of Daft Punk’s Random Access Memories set me back about $38 plus tax.) Sales are strong (up 52% from this point last year) and margins are fat. Vinyl now accounts for almost one-third of all physical sales.

Comparing vinyl profits to those of any kind of streaming is pretty apples-and-oranges. Remember: streaming is NOT the same as a sale. Therefore the payouts cannot be compared head-to-head.

When you buy a record, you’re securing ownership of those recordings forever, allowing you to listen as many times as you want using your own resources.  Streaming is not ownership; it’s just listening on demand, a step up from listening to a song on the radio.  Fees are paid out on a per-listen basis, which is why payments are so small. But as more people get into streaming, the pool of money created by all that advertising will get bigger and payments will increase.

However, it bears repeating again that there’s much more to the issue of tiny streaming revenues. The streamers pay out 70% of their revenue in fees. How much gets skimmed off by intermediaries before it reaches the artists and composers? That’s the question people should never stop asking.

Learn more here (via Bobby) and here.

Alan Cross

is an internationally known broadcaster, interviewer, writer, consultant, blogger and speaker. In his 30+ years in the music business, Alan has interviewed the biggest names in rock, from David Bowie and U2 to Pearl Jam and the Foo Fighters. He’s also known as a musicologist and documentarian through programs like The Ongoing History of New Music.

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