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Transcript of Vintage Connection
The Economics of Vinyl
The vinyl boom can be seen as yet another manifestation of the societal infatuation of all things "vintage" and analog, which is pretty clearly response to digitization, corporitization, and globalization
Supply and Demand
In today's economy, the market for vinyl records is making a comeback however it is modified to fit into the mainstream music market of today and appeal to a new generation of consumers.
Vinyl Record Comeback
LP sales were up 32 percent from 2012, continuing an improbable growth trend that began in the early 1990s and took off around 2007
Oremus, Will. "The CD Is Dying, and Everyone's Going Back to Vinyl." N.p., n.d. Web. 4 May. 2016.
"The Biggest Music Comeback of 2014: Vinyl Records." WSJ. N.p., n.d. Web. 4 May. 2016.
"CD vs Vinyl Record." - Difference and Comparison. N.p., n.d. Web. 4 May. 2016.
"United Record Pressing - Pressing Nothing but Vinyl Records for over 60 Years." United Record Pressing - Pressing Nothing but Vinyl Records for over 60 Years. N.p., n.d. Web. 4 May. 2016.
Decline in competitors sales.
The price levels of rubber and plastic have gone down in the past years. This causes suppliers to produce more because it is cheaper to do so, shifting the supply curve to the right
One factor in macroecnomics that shifts the demand curve is tastes. The taste in the way one wants to listen to music over the past decade has changed. It has become more of a trend to buy vinyls. The raw sounds that a vinyl gives off has attracted many individuals to buy record players instead of CDs. Also, the trend of everyday products to be more vintage has become very popular. Several individuals are leaning towards buying cheap old vinyls rather than buying older CDs. The demand curve has shifted to the right because demand has increased.
Some other factors that have shifted the demand curve include
a nostalgic population
It has become "cool" or a trend to buy old vintage looking record players (Tastes and preferences)
Supply and Demand
The supply for vinyls has increased and at the same time the demand has increased significantly. This has caused the equilibrium price and quanitity to increase. The average price for vinyls in 2000 was around $9.98. A vinyl in 2016 averages around $28. There has been a significant price change.
The music market has three main music producers. These are Universal Music Group, Warner Group Music, and Sony Music Entertainment. Customers are forced to buy from one of these three companies if they want certain records. This allows these companies to have a higher price on the product.
Adjusting Price for Inflation
The "Innocents" LP by Erasure cost $6.82 in 1988. When you adjust this for inflation using CPI this vinyl would cost $13.73. It is hard to find a vinyl of a popular band or artist today for this price.
Ex: Taylor Swift vinyl costs $24.99
The action of customers purchasing vinyls would fall under the category of consumption in the equation for GDP. The vinyl market is elastic, because there are several substitutues for listening to music (CDs, itunes, youtube, etc.) , but because of the recent trends and preferences, consumers are still buying vinyls even with some increases of prices.
N.p., 11 Mar. 2014. Web. 08 May 2016.
Bernasek, Anna. "Two Numbers: Vinyl Records Are Back." Newsweek. Newsweek World, 6 Nov. 2014. Web. 09 May 2016.