New Report Outlines The Full Depth Of Victoria's Vinyl Ecosystem

Six months after an in-depth report named Melbourne the vinyl capital of the world, the second part of these findings has been released, showing the full depth of Victoria's vinyl ecosystem.

It was back in December that For The Record – a research piece commissioned by the Victorian Music Development Office (VMDO) and delivered by Ethan Holben and Audience Strategies – was released, placing the state’s vinyl ecosystem under the microscope, and looking at figures relating to how vinyl goes from the pressing plant to the retail shelf.

The results showed that Melbourne’s 5.9 record stores per 100,000 residents exceeded Tokyo (2.3), London (4.9), and Berlin (2.9), and that Victoria’s store count grew 18% since 2023, while national vinyl sales increased 5.6% to $44.5 million. 

Needless to say, despite no store owners describing their ventures as financially strong, the findings pointed out just how crucial a role vinyl played within not just Victoria itself, but the greater Australian musical landscape.

Now, further findings have been revealed as part of For The Record Part 2, which outlines that the state's vinyl boom is substantially larger than indicated by official figures, with 59% of all vinyl sales now occurring directly between artists and fans – whether it be via websites, shows, or services such as Bandcamp.

The findings show that 26% of these sales are made via Bandcamp, while website sales account for 18%, and gig transactions account for 15%. Distributor sales still make up the lion's share, however, with 28%, while 11% are credited to direct-to-stores.

Notably, the frequency of these sales channels are inverse to the profit per unit for each sale. Assuming a retail price of $40 per unit, with a 300-pressing run costing $15 per unit to manufacture, the average profit for each record sold amounts to $25 for each gig sale, $24 via an artist's website, and $20 via Bandcamp. This lowers further when going direct-to-store, which offers $12 of profit, and $4 when sold via a distributor.

Ultimately, with artists retaining two to six times more per unit sold direct than through distribution and retail, this means that margins are the highest where visibility is the lowest. Unfortunately, the full scope of these economic contributions will likely remain uncounted since direct-to-consumer income is largely outside of ARIA reporting.

However, the findings do show that the total vinyl revenue across Victoria-based independent labels is strong, with figures estimating the value of the economy to be between $2.6 and $5.7 million annually, with central estimates placing it between $3 and $4 million. 

Additionally, 19 out of 30 Victorian record labels surveyed have noted their output has remained consistent over the past three years, with six releasing less vinyl, and four releasing more. This also translates well internationally, with 27 of these 30 labels selling their vinyl internationally, with the likes of USA and Europe being prominent locations. 

While these figures are tending in the right direction, however, there are some pressures facing this positive situation. Notably, 60% of labels cite upfront pressing costs among the biggest challenges they face, with a similar number citing cash flow as a problem.

90% have said they want a dedicated micro-grant programme for vinyl pressing, given that roughly 40% of those earning under $5,000 annually note that a single pressing run costs them more than a full year of their vinyl income.

Likewise, with the cost of living rising, so too is it noted that the economics of manufacturing could be approaching a tipping point. Given that pressing plants have not raised prices despite increased costs in all major inputs – including nickel, PVC compound, energy, freight, and courier fuel levies – the gap is narrowing, and the cost barrier may rise in the near future.

The report also concludes with a number of recommendations on how to ensure that Victoria's direct-to-consumer vinyl economy continues to function in a beneficial manner, with grants to incentivise local pressings being suggested, and targeted outreach for underrepresented artists and labels. 

Additionally, education, data, and infrastructure to make the process more accessible and understandable is recommended, as is further research on a local and national scale, and the exchange of knowledge with peer-led events and programmes.

"Victoria's direct-to-consumer vinyl economy exists because artists and labels choose to build it, one pressing run at a time," the report notes in its conclusion.

"The D2C vinyl economy is already working. The task now is widening access to it, and protecting the conditions that sustain it."

The full findings in the For The Record Part 2 report are available to read now via the VMDO website.

Additionally, applications for Creative Australia's Record Label Grant Programs are now open and include a Record Label Development Scheme and Record Label Marketing and Manufacturing Grant. Applications for both programs close at 3pm AEST on Tuesday, August 4th.

This piece of content has been assisted by the Australian Government through Music Australia and Creative Australia, its arts funding and advisory body