Anyone who has bought a vinyl record or CD in recent years knows all too well that physical music products are not exempt from the inflation that is plaguing US consumers.
In fact, the price of a vinyl record in the US increased by 25.5% from 2017 to 2023, according to Bulletin boardanalysis of RIAA data — slightly larger than the 24.3% increase in the consumer price index over the same time period. CD prices fared slightly better, rising just 20.4%.
However, while music subscription prices are rising, consumers can probably expect physical music prices to remain somewhat flat in the future: Earners who spoke to Bulletin board let's say vinyl prices remain flat in 2024 after the COVID-19 pandemic has disrupted the supply chain and raised the cost of everything from raw materials to labor.
As one music distribution executive put it, these supply chain problems are “flattening out.” As a result, turnaround times have improved dramatically as manufacturers worked to deal with pandemic-era backlogs. “I feel prices will level off as well,” says the executive.
“Our manufacturing prices have been stable for quite some time,” he says Bill HineCEO of Pressing Business. Transportation costs can be improved if the buyer books with flexible dates, Hein says, and reliable ocean freight is used for more of his U.S. deliveries. “Generally speaking, both air and sea transport are more predictable now than they were during the lockdown and prices are generally better.”
Outside of the music industry, rising prices in everyday necessities are a fact. Fed up with inflation eating away at their wages, Americans are pushing back against the high cost of essential goods, and companies are responding with price-cutting efforts.
In July, the CEO of PepsiCo Ramon Laguarta suggested that consumers were tired of two-plus years of rising prices. “Some parts of it [Frito-Lay] the portfolio needs a value adjustment,” he said during a July 11 earnings call. Total sales volume fell 4% in the most recent quarter, and North American beverage sales for the company fell 3%. PepsiCo will respond, Laguarta said, by offering better deals and increasing advertising. For some consumers, Laguarta added, “we need some new entry price points.”
Companies across the economy are sharing PepsiCo's experience with price-weary shoppers. Walmart offers more short-term sales. Aim for low prices. Fast-food giants McDonald's, Wendy's and Taco Bell attract customers with low-cost packages and value-oriented menus. And because it's an election year, Vice President Kamala Harristhe Democratic presidential candidate, has invoked a federal ban on price gouging in the grocery and food industries.
Since vinyl prices are largely based on manufacturing costs, there is nothing that can prevent prices from rising without sellers losing profits. Vinyl retailers set prices based on wholesale costs and their need to cover overhead and other expenses. Artists on record labels have to pay the wholesale price for their physical products and have no control over printing and printing costs, he says Paul Steeleexecutive partner at Triple 8 Management. “Physical prices for our roster of nearly 30 artists have remained mostly the same for a decade, with little inflationary increases here or there,” he says.
But besides current inflation, there are other factors that could push the average sales price higher. Physical music is increasingly becoming a luxury good — a high-priced collector's item with packaging to match. Artists often release multiple LP variants with colored vinyl. And albums released today usually have the expensive gatefold packaging that was common in the 70s.
The way music is distributed in the streaming age also drives up prices. Artists take advantage of unlimited shelf space on streaming platforms by filling albums with more songs at no extra cost. As Bulletin board noted last year, the average number of top 10 album songs rose from 13.2 in 2014 to 19.1 in 2022. A double album on vinyl is more expensive and, as one executive notes, putting more songs on an album often – but not always — they require more mechanical royalties to be paid to songwriters and publishers.
Indeed, some of the most popular vinyl records right now are double or triple LPs. Post Malone's 18-track, two-LP album F-1 Tris retails for $45.89 on Amazon and more at other retailers. 34-piece by Zach Bryan American Heart Break has three LPs and a list price of $44.98. And that's not to mention the more outrageous reissues, like a 2-LP/2-CD/1-Blu-ray package for Van Halen's For unlawful carnal knowledge which carries a list price of $99.98.
Despite the increase in vinyl prices in recent years, sales have yet to slow down. Will this continue? The answer to this question will likely lie with younger consumers who have less disposable income. Michael Kurtzco-founder of Record Store Day, says that vinyl being a premium, collectible product is harder on younger consumers. While Record Store Day succeeded in helping a new generation turn to vinyl records, younger people don't have as much money and are limiting their purchases. “A young customer 18 months ago would come to the counter with two or three records,” says Kurtz. “Now they come to the bench with one or maybe two.”
Catalog titles are often the most affordable option and help offset the upfront price hike. by Michael Jackson Impressive work can be purchased for under $25. Fleetwood Mac's perennial top-seller Rumors offered in both affordable and more deluxe editions. Rhino Records' It's playing now Compilation lines for artists ranging from The Stooges to Gram Parsons to John Prine cost $19.99.
The good news—for all consumers—is that price growth is returning to historical patterns. The average monthly US inflation rate reached 4.7% in 2021, 8.0% in 2022 and 4.1% in 2023. This year, the average monthly increase in the consumer price index (CPI) is just 3.2 % until July. If vinyl prices seem to be continuing to rise, packaging and the growing prevalence of the double album are likely to blame.
