A stack of freshly pressed gold vinyl records at United Record Pressing.
CNBC
This story is part of CNBC's new quarterly series Cities of Success, which examines cities that have been transformed into business hubs with an entrepreneurial spirit that has attracted capital, companies and workers.
Once considered a dying industry, the vinyl record industry has undergone a remarkable multibillion-dollar revival over the past decade. It has been fueled by popular artists like Taylor Swift and major retailers including Goal And Walmartalong with a growing wave of consumers who rekindled their love for the nostalgic format during the Covid pandemic.
“Never in a million years would I have thought that, as a market and as an industry, it would become what it has become today,” Mark Michaels, CEO and chairman of United Record Pressing, the largest vinyl record pressing plant in North America, told CNBC's Andrea Day in the upcoming primetime special “Cities of Success,” airing December 6 at 10 PM ET.
United Record Pressing CEO Mark Michaels inspects a vinyl record.
CNBC
According to Verified Market Research, the global vinyl record market was valued at $1.98 billion in 2022 and is expected to reach $4.12 billion by 2030. More than 41 million vinyl albums were sold in the U.S. last year — the most since 1988, according to the Recording Industry Association of America.
United Record Pressing has become a major player in the vinyl market, producing approximately 40,000 records daily at its Nashville, Tennessee facility. Founded in 1949 as Southern Plastics, the company has a rich history of producing vinyl records for iconic artists including The Beatles, Stevie Wonder, Michael Jackson, Adele and Jack White.
But the company faced an uncertain future 16 years ago when Michaels took over.
Second wind
The vinyl record industry had been in decline for decades due to the rise of more convenient physical formats such as cassette tapes and CDs, a decline in the quality of vinyl records due to lower quality materials and processes, and the rise of digital music. , such as MP3s and online streaming.
Vinyl record sales declined in the 1980s and 1990s. And by the early 2000s, the industry was on the brink of extinction: according to the RIAA, only 1 million vinyl records were sold in the U.S. in 2006.
“I wondered all the time what I was doing,” Michaels said after taking over the company. 'I've had many sleepless nights. [Even] My family wondered what I had done.”
But in the years that followed, Michaels said, he noticed a promising trend: Indie artists showed a growing interest in vinyl.
Hoping to position United Record Pressing as the go-to pressing plant for artists and music producers who valued the tactile vinyl experience, Michaels purchased old record presses from shuttered factories to allow for potential growth.
“Before 2016, you had to be able to find and restore an old record press, and that was a very tough search,” Michaels said.
Demand for vinyl from both indie and mainstream artists quickly led to reissues and colored variants, which Michaels said marked a turning point. That growth gained even more momentum when major retailers like Target and Walmart entered the vinyl market in early 2010.
Regular elevator
When Target and Walmart, two of the largest retailers in North America, decided to stock vinyl, the entire supply chain was significantly affected, according to Michaels.
Vinyl began to reach a broader market segment: consumers who might not traditionally shop at independent record stores but were eager to purchase mainstream vinyl titles.
“We recognized that with all the old presses we had purchased and built the company around, it was not enough to meet the needs of the market,” Michaels said. “Fortunately, a number of companies started producing new record presses in 2016.”
Shortly thereafter, United Record Pressing implemented a growth strategy and moved to a larger location in 2017. The company established a creative marketing team that worked with artists and labels and conceptualized unique vinyl ideas such as liquid-filled, split-colored and scented records.
The company also included a digital download coupon with each record and started a record label, recording artists to tape and pressing directly to vinyl.
Michaels said the company has also launched a grassroots public relations campaign to highlight its 60-year history as the premier vinyl pressing plant in North America.
United Record Pressing's expansion room.
CNBC
The new space, spanning 150,000 square feet in Nashville, not only met current demands, but also positioned the company for future growth – which would come just a few years later as the Covid pandemic provided an additional boost to the industry when people were once again concerned with the nostalgic format.
Today, the medium is the most popular physical music format in the US, accounting for 72% of all physical music sales, ahead of CDs and cassettes, according to mid-2023 data – the most recent information available from the RIAA.
According to Billboard, the average price of a vinyl record has increased from $26.12 in 2021 to $29.65 in 2022, due to higher production costs and the impact of inflation.
Additionally, the vinyl retailer landscape has evolved over time. Indie record stores led the market in 2015 with 45.4% of sales, Billboard reported, followed by internet or mail-order sellers such as Amazon at 32.9%, and chain stores such as Best Buy at 15%.
By 2018, Amazon had eaten into indie store dominance, with both categories accounting for 41% of market share, while Best Buy's share had fallen to just over 10%. And by 2019, major retailers like Walmart and Target were registering on the spot.
While big-box retailers represented just 1% of the vinyl record market share in 2015, they accounted for 14.6% of sales in 2021, according to Billboard.
Artist driven
Michaels told CNBC he is confident the market's continued growth will be artist-driven. That plus a general shift in interest as younger listeners discover vinyl suggests the medium is here to stay, he says.
Artists like Taylor Swift offer collector's versions of their albums, called “variants,” which are multi-colored vinyl records.
Artist Taylor Swift's entire music catalog, including her album 'Red', has been pressed at United Record Pressing.
CNBC
“When Taylor puts out a new record, there might be eight, nine, 10 different variations of that same record – different colors, different combinations, maybe there are some unique songs that weren't on the digital release or on the CD, but you get it on vinyl,” Michaels explained. “There are a lot of fans who say, 'There are eight different variants. I want one of each, please.' They are very supportive.”
The CEO also attributes part of his company's success to the city of Nashville, praising its deep-rooted connection to music and the creative industries, which has created a dedicated and skilled workforce.
“You have the whole musical ecosystem here,” he said. “You've got artists, producers, studios – it all works together in a very symbiotic way. It's the perfect place, and we're lucky to be here.”
TUNE IN: The “Cities of Success” special with Nashville airs on CNBC on December 6 at 10pm ET/PT.