The very best days of “Black Sabbath” are long gone. The legendary British rock band was co-founded by Ozzy Osbourne in 1968. The inventors of Heavy Metal performed in Birmingham for the last time in 2017, but they are still popular: “Black Sabbath” has sold 75 million albums worldwide – and the number is growing, again on records. According to the music company BMG, the most successful vinyl records in the program of the first half of the year came from “Black Sabbath”, from the late singer Joe Strummer of the punk band “The Clash” and the rock group “Garbage”.
But it’s not just heavy metal, rock and punk that are suddenly back on vinyl. The record as a whole is back – and is celebrating a comeback just in time for its birthday. Almost exactly 70 years ago Germany’s first LP (with 33 1/3 revolutions per minute) was presented at the 1951 German Music Fair in Düsseldorf. After the advent of CDs and online streaming services, sales fell dramatically, they had been declared dead time and again – but now things are going up again astonishingly significantly. For a long time hardly anyone thought that was possible.
The musician and Black Sabbath co-founder Ozzy Osbourne with his wife Sharon: His music is still selling well, even on records.
(Photo: Vianney Le Caer / AP)
“There is a very strong trend towards vinyl,” says Hartwig Masuch, head of the Berlin music company BMG. “In the first half of 2021, for the first time since the company was founded in 2008, we made more sales with records than with CDs,” he adds. BMG was only re-established by Bertelsmann in 2008, when the record had been on the decline for a long time. After the CD appeared in the mid-80s of the last century, the small silver discs soon surpassed the record. But now the days of the CD are over: Today, music is streamed online – and heard from the record again.
According to the figures of the Federal Association of the Music Industry (BVMI), vinyl is currently experiencing a high-altitude flight. In the first half of 2021, record sales in Germany went up by almost 50 percent, the record again has a market share of almost six percent in the music market, the CD recorded a significant decrease and has a share of around 14 percent. The remaining 80 percent of the German music industry’s total revenues of around 1.8 billion euros are now attributable to digital business models. A similar trend can also be observed in the USA. According to BVMI, only 700,000 records were sold in 2011, but in 2020 it was again 4.2 million.
Hartwig Masuch used to make music himself and has been the head of BMG since 2008.
(Photo: Barbara Dietl / BMG)
BMG boss Masuch, 67, was once a musician himself and has been in the business for a long time. He is considered one of the pioneers of the Neue Deutsche Welle in the 1980s (when there were almost only records). Masuch believes that the vinyl boom is not over yet: “We assume that this will pick up even more momentum in the long run. We will very consistently make our entire repertoire available on vinyl.” The problem: The demand is so high that the companies cannot keep up with the production. “The production capacities for vinyl records are currently very limited, the waiting times are several months,” said Masuch. The raw material is scarce in the pandemic, many pressing plants have stopped production after the decline of the Schallpatte in recent decades. Now there is hardly anyone left who produces records for the music industry.
The record player becomes a “cultural statement”
But habits are changing. “For many, the record player becomes a cultural statement,” says Masuch, adding: “For them, it’s about the experience of consciously listening to a vinyl record and not having to go through a playlist curated by a streaming service.” So music as an experience. No wonder that sales of turntables are also increasing significantly: they recently increased to around 63,000 units in the first half of 2021. The shelves in electronics stores are full of different models; Stiftung Warentest has recently returned for the first time in 36 years published a major turntable review.
This is good news for the battered music industry: sales of records are significantly higher, and more and more luxury versions are being offered. At BMG boss Masuch, for example, there is an elaborately designed box on the desk, an album by Rolling Stone guitarist Keith Richards, the exterior is modeled on the light wood of his Fender guitar, inside there is not only an LP and a single, but also facsimiles of back-stage passports as well as illustrated and text volumes. Real fans pay $ 750 for it.
Record player sales are also on the up again.
(Photo: Angel Santana Garcia / imago)
None of this can hide the fact that the music market is fundamentally changing like no other. Most recently, the streaming services Spotify, Deezer, Apple and Amazon Music were decisive. But now there is another big source of income and that is Youtube, the video portal that belongs to the powerful Google group. “Youtube is becoming more and more relevant for the entire music industry, worldwide,” says Masuch. This is particularly true in developing countries, such as South America. The income would increase significantly. “Youtube is therefore particularly interesting for addressing fans and consumers,” said the BMG boss.
“Big capital has discovered the music market.”
At the same time, the market as a whole is getting bigger and bigger. According to estimates, the volume of the rights of musicians that will become available in the coming years will amount to between 200 and 250 billion dollars. Masuch says: “A lot will change there.” And BMG, behind the industry giants Universal Music, Sony and Warner by far the number four on the market, wants to benefit from it. In the last ten years, BMG has been very active and has made more than 100 large deals, at that time, according to its own statements, at significantly lower prices than those for which rights catalogs are currently being traded.
Big deal: Singer Tina Turner has now sold her song rights to BMG.
(Photo: Georg Wendt / dpa)
But now prices are rising, and more and more financial companies are entering the fast-growing market in search of investment opportunities and good returns. “Big capital has discovered the music market,” says Masuch. Universal Music has just successfully gone public in Amsterdam. What is important to artists and financial investors in this situation is efficiency and service, says Masuch. That is why BMG and the American financial investor KKR have entered into an alliance to acquire new music catalogs. The two partners know each other well. Together with KKR, Bertelsmann rebuilt the music business from 2008 after the Gütersloh family had left years earlier. Then KKR said goodbye, Bertelsmann took over all shares. Business at BMG is going well: In the first half of 2021, sales were almost 300 million euros with an operating result of 50 million euros.
“The list of the great, established artists who are looking for a reliable partner in the market is very long,” believes Masuch. BMG wants to benefit from this together with KKR. Around 70 deals with a volume of around one billion dollars are said to be “in the pipeline”. BMG has just acquired an extensive portfolio of rights for Tina Turner. Their hits will soon be available again increasingly on vinyl.