Why Vinyl and CDs Are About More Than Music

In just 50 years, we have moved from vinyl to cassettes to CDs to digital downloads and streaming.

Recorded Music Formats

While streaming continues to occupy our #1 music listening spot, CDs and vinyl reflect our shifting tastes.

Until 1984, vinyl’s share was more than one half but by 1999, it had plunged to .4 percent. Now though, its sales are again ascending. Some industry analysts say the increase is because of higher quality sound. In addition, there is a crowd feeling rather nostalic about an old format and yet a third group likes the gimmicks LPs permit.

As for CDs, they had their start in Japan with Billy Joel’s 52nd Street during 1982. From there, they spread to Europe and the U.S,, where the first CD players cost $900 ($2700 in todays dollars). Equally pricey, discs, at $26-20 were the equivalent of $48 to $60 today. But prices dropped and their popularity surged. It was a win win. Record companies could charge more for them while consumers thought they looked cool and could easily carry them around.

Below you can see the return of vinyl and perhaps the slow demise of the CD after a slight pop in 2021:

Our Bottom Line: Creative Destruction

Although he died in 1950, economist Joseph Schumpeter (1883-1950) could have insightfully analysed the evolution of the music industry. As the scholar that first described creative destruction, Schumpeter told us that when entrepreneurs propel progress and productivity. they also create the pain connected with the demise of old industries as new products and processes replace what had existed.

Through creative destruction, autos decimated horse and buggy sales, the light bulb eliminated kerosene lamps, and typewriters disappeared. We could also say that creative destruction is the reason that new recorded music formats brought us convenience, quantity, and affordability.

From an animated history of recorded music sales from AEI, I’ve copied the turning points that illustrate creative destruction repeatedly changing the industry.

First we had vinyl:

Then, by 1984, cassettes had entered the #1 spot:

Next, in 1991 CDs moved above cassettes:

After that, CDs remained in the top spot for 21 years until digital downloads replaced them:

Then,  finally we get streaming.

At 84 percent of recorded music revenue, streaming has been dominant.

We can only start to imagine the impact of new jobs, technology, and manufacturing tools as creative destruction repeatedly unfolded.

My siurces and more: With USA Today and WSJ updating recorded music formats, I too could not resist returning. Then, Mark Perry’s clever animated charts completed the picture. (Please note that parts of today’s “Bottom Line” were in a past econlife post.)