Collecting vinyl records as an investment has gained popularity in recent years, but opinions on its viability vary. Some collect for the love of the hobby, while others collect with the intent to turn a profit. Those who choose the "turn a profit" route are often and lovingly referred to as "flippers" by tried and true collectors.
While the demand for vinyl records has recently calmed, all one must do to see the potential for a come back is to review Billboard's article “How Vinyl Got Its Groove Back,” which details the state of the vinyl record industry. Since 2016, vinyl album sales have increased from 13.1 million to 49.6 million in 2023. This represents a growth of nearly 300% over the last 8 years. What does that look like in real numbers? 224.9 million albums purchased since 2016. That is a lot of vinyl! Not convinced it is a medium that is here to stay? Consider this fact. The average vinyl music buyer continues to skew younger (Luminate Insights Music 360 survey)
So, if Luminate is stating there is hope for vinyl's long term growth, why did it report that vinyl sales in the US were down 33% in 2024 over 2023? According to Discogs, the reason for the error was a result of a change in the way Luminate collates its data. For the past 30 years, Luminate would sample independent stores and extrapolate sales of CDs, vinyl and cassettes to produce data for the whole of the United States. However, as of December 2023, Luminate switched to a model that counts actual sales from independent stores in the whole U.S. market.
Regardless of the data and projected growth in the vinyl record industry, the question remains, is vinyl record collecting a good investment? The answer is yes and no. Yes it is a good investment if you are a collector who loves to collect music on vinyl. No it is not a good investment if you are merely looking to flip vinyl for a profit. While there have been some recent examples of vinyl selling for outrageous prices (e.g., Santana Abraxis Mobile Fidelity Sound Labs One-Step), those are few and far between. This is especially true when you look at the total number of vinyl records produced and sold each year and the number that command very high prices.
That said, consumers have become more aware of mastering engineers and pressing plants who have gained a reputation for producing exceptional vinyl records. See 7 Tips For Buying Vinyl Records Online for more information. Therefore, albums from those industry experts are more in demand than ever and can be snatched up quickly. This is especially true for limited releases (e.g., The Cars Rhino HiFi, Miles Davis Birth Of The Blue). Such consumer and manufacturer behavior can result in high prices on the secondary market very quickly. No longer does one have to wait for time to pass to possess a high priced and valued record.
All that said, here are some key points of consensus among collectors and investors:
Market Growth: The vinyl record market has seen significant growth, with sales increasing steadily over the past decade. This resurgence has led many to view vinyl as a potentially lucrative investment.
Condition and Rarity: The value of vinyl records heavily depends on their condition (graded from Mint to Poor) and rarity. First pressings, limited editions, and records from iconic artists often fetch higher prices.
Long-Term Value: While some collectors have seen substantial returns, the market can be volatile. Trends can shift based on nostalgia, cultural phenomena, or the rise of certain genres.
Passion vs. Profit: Many collectors emphasize the enjoyment of music and the act of collecting itself over purely financial motivations. This passion can drive demand, but it also means some collectors may not prioritize investment returns.
Research and Knowledge: Successful vinyl investing often requires knowledge of the market, including understanding artists, labels, and what makes a record desirable. Investors who are informed tend to make better purchasing decisions.
Storage and Preservation: Proper storage and care are crucial in maintaining the value of vinyl records. Poorly kept records can lose value quickly.
While collecting vinyl records can be a rewarding investment for some, it requires careful consideration, market research, and a genuine interest in music. It can also be stressful, as interests can change with the wind and be impacted by forces outside a flipper's control. For true collectors, volatility is not a factor. Therefore, the reward is constant and not contingent on market forces. Collecting for the love of it seems to be an approach that is not only the most satisfying in the short-term, but also the most rewarding long-term.
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