A Turntable Maker Tries to Spin Up­mar­ket

Cor­po­rate Strat­egy ▶ Crosley is try­ing to move be­yond en­try-level record play­ers ▶ “We want to put this in front of the haters”

Bloomberg Businessweek (North America) - - Focus / Small Business -

At the South by South­west fes­ti­val in March, an Ur­ban Out­fit­ters store in Austin in­vited aspir­ing mu­si­cians to come and cut their own sin­gles. Step­ping into a dress­ing room, one young rocker picked up a guitar, leaned into a mi­cro­phone, and be­gan to sing: “Time is money, when you’re liv­ing funny. But a smile will pass you by.” The tune was si­mul­ta­ne­ously be­ing etched into the grooves of a plas­tic record. Then the song was played back on a minimalist turntable called the C10.

With its wood ve­neer base, ad­justable ton­earm, and high-end Orto­fon OM 5E car­tridge, the C10, priced at $399.95 and up, is Crosley Brands’ at­tempt to move be­yond the mar­ket for en­try-level record play­ers, which it dom­i­nates. Crosley is also the world’s No. 1 turntable brand, with 1 mil­lion sold each year.

Mod­ern Mar­ket­ing Con­cepts li­censed the trade­mark from a de­funct Cincin­nati home elec­tron­ics com­pany in the 1980s, and the prod­ucts ini­tially evoked this retro her­itage, with ra­dios, CD play­ers, tele­phones, and other com­po­nents made to re­sem­ble an­tiques, of­ten with a turntable slapped on top. By the mid-1990s, Mod­ern Mar­ket­ing, whose head­quar­ters are in Louisville, was sell­ing 20,000 turnta­bles a year through out­lets such as Sears, Kmart, and QVC.

In 2001 the fur­ni­ture re­tailer Restora­tion Hard­ware com­mis­sioned the com­pany to pro­duce a set of cus­tom briefcase Trav­eler turnta­bles. The mod­els sold well. But the real rev­e­la­tion was that the cus­tomer was younger, fe­male, and com­pletely new to vinyl—in other words, the op­po­site of the consumer Crosley had long tar­geted. (Record mak­ers have also taken note; see page 71.) “Th­ese things didn’t have to be for that older crowd that still had records in their base­ment,” says Bo Lemas­tus, chief ex­ec­u­tive of­fi­cer of Crosley Brands. “This was an au­di­ence go­ing out and buy­ing vinyl.”

The com­pany re­jig­gered its of­fer­ing to cater to this new gen­er­a­tion of vinyl con­sumers, churn­ing out a dozen or more de­signs each year, in dif­fer­ent shapes and colors, cus­tom­ized for dif­fer­ent re­tail­ers. Busi­ness picked up, pro­pelled by vinyl’s comeback: U.S. sales of new al­bums topped 12 mil­lion in 2015, up from a low of 900,000 in 2006, ac­cord­ing to Nielsen Sounds­can.

Un­like more ex­pen­sive stereo equip­ment, most Crosley mod­els are plug-and-play, re­quir­ing no ex­ter­nal speak­ers or am­pli­fiers, and cost $100 to $200. “They are good turnta­bles at a re­ally af­ford­able price,” says Rachel Al­bright, di­rec­tor of cre­ative mar­ket­ing and con­tent at Ur­ban Out­fit­ters, the youth-ori­ented de­part­ment-store-chain that’s one of Crosley’s big­gest ac­counts. Jeff Bar­ber, owner of Toronto’s largest record store, Sonic Boom, says that try­ing to steer cus­tomers away from Crosleys to bet­terqual­ity turnta­bles is a los­ing bat­tle. “They’d just point and say, ‘I want the pink one.’ ”

The global turntable mar­ket is in­creas­ingly seg­ment­ing into dif­fer­ent price points, says Heinz Licht­eneg­ger, CEO of Aus­tria’s Pro-ject Au­dio Sys­tems, which de­signed and man­u­fac­tures the C10. If Crosley adds more ex­pen­sive mod­els to its lineup, it may suc­ceed in get­ting a good por­tion of the 5 mil­lion who own one of its lower-priced play­ers to trade up. To suc­ceed, the brand first needs to con­vince its nu­mer­ous crit­ics that it can make a turntable that sounds as good as it looks. That’s what the C10 is for.

Crosley Por­ta­ble Record Player Crosley C10

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