VINYL COUNTDOWN
Columbia House (you remember, of 12 CDs for a penny fame) will make its return this year, mailing LPs to subscribers. As Ben Rayner explains, not everyone is buying in,
“Twelve CDs for a penny? How can I lose?”
My nascent CD collection would not have been what it became during the early 1990s without Columbia House, so the vague, recent announcement that the fabled music mail-order service is planning a return as a vinyl-delivery outlet in early 2016 did not slip by without a fond twinge of nostalgia.
Columbia House was willing to turn a blind eye to the fact that I was simultaneously taking advantage of its introductory offers under several aliases — Ben Rayner, Benjamin Rayner, B. Maxim Rayner — while not always satisfying the more usurious “membership agreement” well into my university years, when I’d landed in Ottawa from rural New Brunswick and no longer had to drive an hour to purchase records.
Even then, the lure of another box of cheapo discs delivered to each new student address proved too tempting to abandon.
Eventually, the monthly Columbia House catalogue quite literally ran out of CDs I wanted and I found myself staring at copies of the Rolling Stones’ Flashpoint and the Cranberries’ To the Faithful Departed and other albums I didn’t really want, and feeling my first real stings of First World wastefulness.
I had outgrown Columbia House. But at that time, Columbia House didn’t really need me. In 1994, 15 per cent of all discs sold in the U.S. were moving through music clubs like Columbia House and BMG Music Club — including, as the Boston Phoenix noted in 2011, a whopping three million of the 13 million copies sold of Hootie & the Blowfish’s 1994 megahit, Cracked Rear View.
By 1996, the year I jumped ship, Columbia House was reporting peak annual profits of $1.4 billion.
The music industry would, of course, fall into perpetual shambles minutes later. Amazingly, though, Columbia House staggered on through the advent of online retailing, MP3s, Napster, iTunes, a 2005 merger with BMG and much desperate format changing until 2009, when it abandoned “direct” music marketing to sell DVDs.
The Canadian branch declared bankruptcy the following year, although the U.S. division made it till last August before doing the same — owing, as Rolling Stone has reported, $63 million to more than 250 creditors with company assets now valued at a mere $2 million. Enter John Lippman. A former Lehman Brothers specialist in “mergers and acquisitions and private equity,” he snatched up the remnants of Columbia House at auction l ast year f or “about $1.5 million” and, in a Wall Street Journal piece published on Dec. 22, declared his intention to revive the brand as a mail-order distributor of vinyl LPs in 2016.
Lippman, reached via email this week at the offices of Columbia House’s parent company, Filmed Entertainment, Inc., begged off on providing any further details beyond what the Journal initially reported — including whether or not the resurgent operation will be available to Canadian consumers — with a promise that “we should have some more news on the club in the not too distant future” and that he would get in touch when “we have more to share.”
For the moment, then, all we really have to go on is a new Columbia House home page declaring that “one of the most iconic names in music will return in 2016.”
So is Lippman on to something or completely mad?
Pro: Vinyl is back The vinyl LP’s resurgence as a popular music medium is overreported and slightly exaggerated, perhaps, but it’s a real thing.
Globally, old-school records accounted for just 2 per cent of the music industry’s $6.8-billion reve- nue from sales of physical product in 2014, according to the International Federation of the Phonographic Industry’s last Recording Industry in Numbers report, but those sales were also up 54.7 per cent in 2014.
In Canada, Nielsen SoundScan statistics have had total album sales hovering around 12.3 million for the past two years as of June 28; i n 2015, vinyl accounted f or 207,000 units moved versus 6.3 million in CDs and 5.7 million digital. Compare that to 2014, with 148,000 vinyl units versus 6.9 million CDs and 5.2 million downloads. That’s a boost of 39.9 per cent in the first half of last year.
“Prior to 2015, we weren’t tracking vinyl and CDs separately,” said Siobhan Ozege of Music Canada. “Now, the demand has increased so substantially that it warrants its own tracking. We do know that approximately 18 per cent of physical product that was shipped in 2015 up to Oct. 31 was vinyl.
“Of course, given that there were some big releases later (last) year, namely Adele, and then the holiday season — where turntables were the hottest item on Amazon — it’s possible that these numbers will change once we get the final yearend numbers, which won’t be until the end of January or early February.”
So vinyl continues to be a good gamble, whatever Columbia House plans to do with it. Con: There aren’t enough records to go around Already one Canadian pressing plant, Calgary’s Canada Boy Vinyl, has come online to fill the homegrown gap left since Quebec’s Rip-V shut down production last January.
Another, Precision Vinyl Pressing, will be ready to go in Burlington in June after partnering with Prague’s long-lived GZ Vinyl to bring 10 more hotly sought-after presses to Canada, with another 10 set to come in Year Two if everything goes smoothly, according to owner/director Gerald McGhee, who’s also president of the online music retailer Isotope Music.
Precision already has verbal commitments to occupy “nearly 40 per cent of our capacity” in June, he says. He’s been in contact with all the Canadian major labels, who are internally predicting a 30-per-cent increase in the domestic market over the next three years. He sees no sign of the business slowing now that Walmart is planning to stock vinyl in some of its stores; another large Canadian retailer has privately approached the company with tentative plans to increase its vinyl floor space by 500 per cent. The major problem at the moment, McGhee said, is that no one can acquire enough vinyl inventory to keep up with demand. Universal Canada won’t be able to get its hands on the meagre supply of LP copies of Justin Bieber’s Purpose available in the States, for instance, until late February. Isotope Music, despite seeing its vinyl sales jump 200 per cent in the first quarter of 2015, still suspects “we were missing the boat largely because we didn’t have inventory,” he said. So Columbia House might make a go of it, provided stock is available.
“Put it this way: I think if they do it, because of the fact they have that name, it’s a win-win for them,” said McGhee. “If they go with that same model that they used to, I think it’ll work. I think people will buy it.”
Vinyl-pressing capacity is a bit of a hurdle. Dean Reid opened his Canada Boy Vinyl plant on Sept. 12 and, without doing a shred of advertising or making any calls to solicit business, is already trying to manage demand against making sure his six-press plant can handle the load.
“I don’t want to be in a position where we sign up a bunch of people and take a bunch of orders, and then make them wait for four months or five months to get their records,” he said.
Over the past two years since he started musing about starting his plant, “everything went from being weird to totally intense,” Reid said. He’s been heartened by the support he’s received from other manufacturers looking to off-load the bottlenecked demand.
“It’s competitive, but there’s enough work around for everybody and everybody knows that,” he said. “The more presses that go online in a global sense, it’s actually going to stabilize the market . . . There’s plenty of room in the sandbox, so there’s no reason for all the manufacturers to be cutting each other’s throats because it doesn’t need to be that way.
“If there’s one thing that’s gonna kill the business, it’s that people will get sick of this nightmare experience of trying to get records. If you’ve got a band that’s hot, man, you don’t want to be waiting six or eight months to get their record out there.”
Verdict: The jury is out Not everyone is impressed with Columbia House’s comeback plans. Notoriously crusty industry analyst Bob Lefsetz, of “Lefsetz Letter” infamy, is dubious. “It’s ridiculous. And you can quote me on that,” he emailed.
“A story in search of substance. Like the inane press on the comeback of the cassette.”
Others are willing to give the old warhorse a second chance.
“The more vinyl you can get into people’s hands, I don’t care,” said Jeff Barber, who runs Spadina Ave. record shop Sonic Boom. “If someone would have asked me when we opened the store in Toronto in 2001, I thought it was probably a six-year run we would have because that was right at the heart of Napster. I never would have professed to have seen the resurgence of vinyl and we wouldn’t be in business without it.”
Ditto Tyler Barstow, co-founder of the Colorado-based “record of the month” club Vinyl Me, Please. The mail-order service, which sends out one lovingly curated record per month to a subscriber base that started with just 12 customers in January 2013, hit 10,000 members last February and is far beyond that heading into 2016.
There’s room for everyone, he says, and the more people discover the superior sound quality and experience of collecting vinyl, the more are likely to keep buying vinyl.
“I think anyone who starts doing really great work in vinyl is good for it,” Barstow said. “I’m not going to say that every single idea is the same, but I’m excited to see what Columbia House comes up with.”