The vinyl revival: How to create a legacy industry

The last 40 years has seen a remarkable turnaround for the vinyl record industry.

At its commercial peak, the industry sold more than 300 million records every year in the US during the 1970s. From there, sales of LPs slumped to just one million a year in 2006.

Since then, sales of vinyl have climbed consistently. The industry sold 43 million units last year - the highest level since 1990 - fuelled in part by Record Store Day.

Vinyl LPs outsold CDs for the second consecutive year in 2023. Meanwhile, revenue from record sales totalled £1.4 billion – a staggering 71 per cent of physical format revenues.

They may be a legacy product, but they have new markets and are clearly enjoying a major revival.

Vinyl fans are not just buying classic albums in their original format. Taylor Swift's album 1984 - released during the digital age - was the best selling vinyl album of last year.

Our research looks at how this happened, and provides practical insights that could potentially be applied to other legacy industries.

Any revival requires two elements – the preservation of the ability to produce, and the recreation of demand. Importantly, the vinyl renaissance did not come as a result of management intervention or strategy – there is a revival group now, but it’s late to the scene.

While there is residual demand for most legacy products, for demand to recover, a product must transcend its original purpose.

How vinyl gained a new appeal

Vinyl is no longer a convenient storage medium of audio information for most of the market. Its use for this purpose is restricted to a few archivists, or those who wish to avoid digital storage – including some libraries.

Vinyl has proved to be much more than just a storage device, and has succeeded in establishing an emotional attachment that has driven renewed demand.

Records have become a symbol of authenticity, and of the art and the purity of the music they contain. They can be a household decoration and a symbol of identity. 

Physicality tangibility makes a difference, and musical purists are attracted by the original form.

Vinyl collections demonstrate to others that you are cultured and have good taste, and the sense of identity that brings encourages a powerful emotional attachment. Such products exhibit multivocality, in that they speak to a range of consumers in many different ways.

Demand has also come from consumer resistance to new higher technology products and digitalisation.

This trend can be seen more widely in the craft movement – including craft beer – which helps put people back in touch with the way the product was sourced and made, creating an intimacy with the consumer. 

Our research shows there is more life in declining technologies than we think. It turns out there is at least a residual demand for just about everything. Among the few products that have all but died out are fax machines - although even here some demand exists today, especially in Japan.

How to maintain production of a legacy product

If demand sinks to a residual level or is rejuvenated, then the focus switches to how to maintain production. It is often only when practices are in danger of becoming extinct, or become re-associated with a market and profitability, that this attracts attention.

Our research focuses on why producers of legacy technology do not die out and how to keep them alive.

In the case of vinyl, only a few producers kept going. For most it was not possible as the market shrank so dramatically. Those producing legacy products need to be realistic about the danger of maintaining activities that are no longer profitable.

However, in Japan, several of the key component makers in the industry were small family run businesses, including, Public Records Co. Ltd, the only factory that still makes lacquer disks which are used as masters for vinyl record manufacturing.

These companies had a different management philosophy to the mainstream. They believed that if there was any demand, it was their role to serve those customers, profitable or not.

In some ways, focusing on an obsolete technology/legacy product is the least risky thing possible, as market growth and shrinkage have already taken place. 

Such companies are steeped in tradition, and set up with objectives to match. While similar western companies tend to focus on a single product, in Japan they often adopt several lines of niche business. These are able to cross subsidise each other, helping the firm to stay competitive.

Accident or design - what drove the vinyl revival?

This can ensure that the ability to produce legacy products is sustained even during the weakest periods of demand. With the vinyl renaissance, a few companies in Japan have done very well out of this longer-term multi-niche strategy.

Maintaining and expanding production requires such legacy professionals to be joined by new enthusiasts.

In vinyl, a small number of people were fascinated with making records and that also helped sustain production until demand revived.

Individuals and groups of friends around the world started buying second hand equipment, opening up their own pressing factories, and creating tools for making records without relying on large manufacturing companies.

Production was also maintained by accident. The Czech Republic currently has the biggest record pressing plant in the world (owned by GZ media). This is arguably because it was behind the curve and one of the last plants to keep going when others exited the industry.

The remaining producers of legacy products are able to reinvent themselves as authentic, unique and original – rather than just being one of many similar mass producers.

To avoid the loss of skills and knowledge, all processes in legacy industries should be documented.

Plurality in the range of markets and methods of production is also important for legacy industries – so if one dies out then others will continue.

A declining practice may persist across generations if it is made more accessible and resilient by reducing its dependence on specific types of meanings, materials and competences that risk being lost.

How to ensure legacy products are sustainable

Producing vinyl records arguably has only limited environmental impact compared to other industries. Nonetheless, manufacturing and transporting a physical product represents a less sustainable option than digital music.

This could be a bigger issue for some other legacy products, especially as more emphasis is placed on carbon reduction and the circular economy. But even here, solutions may arise.

Records can now be made from a range of materials, not just oil-based plastics like vinyl. Emissions associated with producing and transporting records can be reduced through the use of green electric options.

There is also a move to distribute small disk pressing plants around world to limit the need for physical transport. Similarly, high end internal combustion engine vehicles can be converted to run on biofuels or electricity.

Our research brings together practice evolution and custodianship, showing that to preserve a declining practice, custodians do not only need to renew the meanings inscribed in the practice but also re-generate the materials and competences that constitute it.

Progress is not always about replacing the old with the new, but about increasing the number of options available, in a sustainable and ethical way.

That should be music to the ears of those who are interested in preserving legacy crafts and products.

Further reading:

Why a winning strategy starts with a challenge, not an opportunity

Increase the odds of success in digital transformation

Growing pains: How to help small businesses scale

Custodianship across generations: Preserving the practice of vinyl record manufacturing

Rene Weidner is Associate Professor of Organisation Theory at Warwick Business School. He teaches Organisational Behaviour on the Global Online MBA and Current Issues in Leadership on the MSc Management. He also teaches on the Undergraduate portfolio.

Learn more about strategy on the four-day Executive Education course The Strategic Mindset of Leadership at WBS London at The Shard.

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