A couple of years ago, when vinyl was just starting to explode again, I suggested that what we should be focusing on is not how well records are selling, but how well turntables are. As usual, there’s a good reason for this.
A quick economics reminder: we can identify a couple of ways in which two different goods are related to one another. One such relationship is that of substitutes, where one good can do the job of another – streaming and downloads, for example. Another is that of complements, where a good adds to the value of another good. Back in my school days (showing my age), the canonical example was records and record-players.
These days, the co-origination of the iPod and the iTunes music store might be a bit more familiar. Apple had this new, portable music file player they called the iPod and they needed to give people a reason to buy it. Simple answer: create a music file store, where customers can get songs to put on their new shiny iPods. It worked rather well, for a while. Years later, the iPhone and the app store did the exact same thing – what’s the point of having a smartphone if you don’t have any cool apps that let you use the “smart” functions.
One feature of complementary goods is that the state of the market for one can be used to make predictions about the other. If music download sales are heading down the tubes, it’s a fair guess that music players aren’t going to be seeing much action (leaving aside the fact that there’s a superior substitute for these – the aforementioned smartphone). Similarly, sales of turntables can be a predictor of vinyl record sales. In a way, one that’s better than the performance of the actual record market, to date.
Vinyl has been of some interest to us for the past couple of years, because of its unexpected resurrection and consistent growth since then. It is still very much a niche market, but the big question is: how much bigger can it get? For me, the market for turntables holds the answer.
Vinyl sales can continue growing in two ways:
- Existing customers can keep buying new releases (or catalogue they do not yet have), or
- New customers can enter the market.
What do you need to play vinyl? A turntable.
I hope this makes it clear why I’m so interested in how turntables are selling. If folks are buying turntables, they’ll also be buying vinyl – otherwise, what’s the point? On the other hand, if nobody’s in the market for turntables, then all the labels putting out vinyl are chasing the same customers – which doesn’t bode well for the health of the vinyl market in the long run.
Now, you’re probably guessing that there’s a reason why I’m bringing all this up today. As it happens, I’ve been seeing quite a few turntable-related news stories pop up over the past year (a good sign in itself), but there’s one particular bit that caught my eye last week. Apparently, the Jensen JTA-230 turntable was a top-selling home audio product on Amazon over the holidays.
Hmm…
The fact that a turntable is making the best-seller lists at Amazon is noteworthy in itself, but the feature-set of the JTA-230 hints at some additional nuance. It’s cheap, for a start – going for around $49 at the time of writing. It also has built in speakers, a USB port and AUX input. These add up to a very specific product classification: an entry-level, casual-listener piece of kit. It doesn’t seem much like something a DJ would be buying, nor does it appear to be something a die-hard vinyl aficionado would be buying as an upgrade to his or her sound system. No, it seems exactly like the thing you would get someone as their first record player.
In fact, reading the reviews, it appears that a lot of folks did just that, giving kids that entered their prime music-listening age post-Napster and iTunes a first chance to experience listening to vinyl. Sure, for some the thrill will wear off soon enough, but others are gonna want new records to play (and possibly a better player in a while).
This suggests that we’ll continue to see growth in the vinyl space. Given that vinyl sales already bring in more money than streaming, that’s probably a Good Thing.
