The Vinyl Record Mirage - Part 3

Lost Highway Circulation

This is part 3 of 6 from this series. This is designed to be an educational resource and if one doesn’t want to learn anything they shouldn’t be reading. I’d request any feedback be kept until the final installment is posted as additional questions might be answered.

Bear in mind requests for any stories here to be removed will be ignored.

The other parts can be read here: Part 1 – Part 2

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The realities of underground black metal vinyl production you are not aware of. (cont.)

R-5: There are tens of thousands of dollars tied up in product nobody buys with the potential for a vinyl record product to become a financial “black hole” or dead-end release higher than other formats.

For an in-depth look at the concept of a dead-end release please watch this video and for more information on the entire industry of deadstock please watch this video however much of the latter will be summarized below. Of all the concepts explained in this article, this one (even more than the logistics problems) was to me the most surprising and I think for readers this will be the one to sway the most opinions on this vinyl record resurgence everyone is ecstatic over. Before I begin, it needs to be established that it is very common for anyone in production to attain the right to publish a project (you see this a lot with broadcast rights to movies/TVs based off novels) with either no intention of ever publishing it or not actually having the resources to complete the task. Labels will also secure vinyl production rights and starting the project with good intentions but are then either forced to pause the project indefinitely due to issues (as I outlined somewhat above in part 2), change the project into something more commercially viable (we had this happen a lot with 7” before abandoning the format) or cancel the projects at a loss years after the fact. Some of the motivations behind these actions are usually to avoid a competitor pressing something, people involved in the project either are (or become) difficult during pre-production, decline in economics, unforeseen hardship/emergency, inexperience or plant closure. A vast majority of the labels who are not extremely selective with what gets pressed onto vinyl end up backed up with releases indefinitely to their detriment.

Now with it being established that offers basically being infinite to the right projects, let’s now turn our attention back to the physical records themselves. GZ Media purchased a warehouse where they will bill you for storage so you can press more records with them (they’ve even attempted to expand this service into CDs) and then pay them to store them for you until an undetermined later date when the products are either shipped to you or you pay them to recycle (there is a type of machine record pressing plants can get that basically reuse the PVC from older records) the surplus you likely didn’t need. Many larger labels also will press 1000+ if need be to keep the band or justify production costs (if you pay 1000 Euros for some famous artist to overcharge you for cover artwork or layouts (yes, people will charge that much for layouts) you can spread out these expenses by pressing more copies to avoid a very high retail price) for the project. These surplus records are then just circulated from warehouse to warehouse, sold off under the table at liquidation prices, dumped in stores or sent to other media wholesalers/distribution companies who have no clue what to do with them, all at a disservice to the bands because nobody is consuming their work. A vast majority of this stock isn’t ever sold, takes decades to sell out or even worse, is just pointlessly repressed multiple times by other companies (this will be explained towards the end of this article) because labels hate each other.

The main justifications outside of production related concerns for these larger presses/overall increase in supply without proper vetting of demand include cheaper manufacturing costs overall (even though it is more expense to press, per unit they are cheaper) and easing of logistics concerns. Certain larger volume record deals are consignment deals (payment due after shipping) that are usually just somebody parking a truckload of low-selling products somewhere for several years then writing everything off as business losses on taxes years later when they refuse to accept return of the shipment that nobody bought. Adele famously clogged up all the production resources used by industry by pressing a large number (with multiple variants for Walmart, Target, Amazon etc.) of one of her albums during the pandemic which while allowing them to make a profit on it (even if it were sold for $5) just sat on endcaps in every retail outlet that I never actually saw decrease severely. The by-product of this was delays felt throughout the music industry to no avail as I highly doubt that if anyone bought that and the final product wasn’t listened to enough to move it to a level above a kid’s toy. To reiterate what I said above, this entire concept is just a disservice a band’s album, doesn’t incentivize them to either promote or care about the final finished product, is a monetary drain and obviously a complete waste. Excess waste such as this is completely common within the vinyl record industry, you will even see people still having full pallets worth of stuff in storage somewhere that are worth a fortune years later because the producers simply quit music for 20 years without selling anything.

The expenses related to storing deadstock add up (into as I’ve been told by one of my European contacts, sums in the tens of thousands of Euros) as do all the delays/difficulties during pre-production for locked up projects that can’t be cancelled. For stuff stuck in pre-production the best solution is to obviously just give up and cut losses, however you have some situations that this isn’t possible (like one of my labels bands who recorded an albums worth of tracks 5 years ago, that likely will not all be completely released until next year) with the end result not being worth all the expense of getting it correctly done. When these cursed projects finally materialize at a loss, they become deadstock (usually quickly) which becomes a completely different type of burden. While the best solution is to just simply dispose of the stock (once a year I pay to take a carload of stuff to the city dump at about $40 USD) rather than pay rental/storage expenses indefinitely, several problems exist with this: people who never have nor ever will buy the product complain online, usually the stock will rocket up in value (examples being Arya Art or a bunch of Japanese ambient music titles/soundtracks which sold very modestly or not at all upon their original releases) the minute it is 100% genuinely not obtainable, people are too greedy or egocentric to admit defeat, the band splits up after release in dispute so the release is pointlessly redone or there is no way to get the records to where the demand actually is so thus they are only deadstock in the country they were released in.

I call projects/releases like what I described above as a “black hole” release, where the releases constantly consume money even after they are released with no possibility of a return. While this can/does happen with 12” projects, it is pretty much synonymous with 10” (people do not want to move the turntable needle to start the record) and 7” (due to the short runtimes) records, which are 2 sizes of records (45 RPM 12” can be debated) that are not suited for black metal as the ideal minimum pressing quantities for these are 1000+. You also see these “black hole” projects come about with split releases, bands who are not experienced (being active for 1-5 years with a properly built reputation is a must), labels who are inexperienced/overworked and/or projects involving people who are somehow mentally impaired/delusional/unreasonable. It is also not possible to accurately estimate demand for many of these albums being released and you will not know how well it is going to do until it exists. Storage/rental expenses add up very quickly during this process with many labels realizing that they need to pay to expand their storage capacities or alter distribution arrangements (thus impacting their wholesale income) after a few of these records don’t resonate as originally envisioned.

Some of the causes for these “black hole” projects that cause producers to indefinitely pause projects (so thus they are not generating a return on their expenses and potentially losing money) are extremely noticeable during the pre-production process. These (usually unforeseen) circumstances make it more economical to either cut losses, move the project to other parties to deal with or have to agree to press other products to “relocate” the expenses (I overpaid on pre-production for an upcoming reissue project and have to do another CD release for the same band to absorb expenses rather than price the record at a price nobody will pay for it) to, which just makes more work/delays. Examples of such causes are: producer (whoever pays for something) gets ripped off/overcharged on some expense like mastering, layouts or cover artwork, pre-production services need to be redone, the band is incapable of showing up or becomes too difficult to work with for the pre-production (yes, it is that hard for some people to just participate in stuff like communicating with the mastering tech) process, additional material must be written/recorded (doomed 10” or 7” projects), contributions have to be re-recorded due to disputes within the band, band splits up, bands make some bad decision (making some anti-political statement when their product is geared toward a political audience) that renders their brand non-viable, band gives release rights to another label, the final envisioned product becomes extremely expensive to get completed, something else renders the final product too difficult to get completed and/or the label determines after money is expended that they are not going to get whatever return they thought they were. I have also stopped production on certain projects so that they can be released during more economically prosperous times as to not negatively impact the bands with a dead product. Inexperienced labels out there will also agree to do jobs that are beyond their capacity and then simply self-destruct at some point in the process which is the origin of many of these “rip-off” stories in underground music that somebody simply fled their mess rather than get help, it’s what happened to my business partner in Brazil who ripped me off $3,000 USD.

Solutions to many of these problems while on paper sound good do not actually work and potentially make the problems worse. Co-releasing (finding somebody to help you pay for this) has proven to be ineffective, not yielding the promotion as described for either bands or labels and many pressing plants are constrained by local area regulations from separate invoicing/shipping so one party is shouldered with extra work. Outsourcing the releases to other larger companies usually gets you or the band ripped off, plus you are then at this larger entity’s discretion (I stopped all licensing after I was told to have a band on my label simply go fight somebody for records they didn’t receive from the licensee’s middleman) and their values may be different than yours. Pre-orders as already established in part 2 don’t work and the solution for fixing that is actually the same as when you get in over your head, get some type of loan/credit solution to buy your way out of the mess then address repaying the bank at a later time when your customers/clients are not impacted by a mistake you hopefully learned enough from to not repeat again. The only three things I’ve found that work to solve these problems are: finishing the project in some form then cutting losses later, canceling the release at a loss to you or pausing it indefinitely until a solution can be found. Bands/Labels can also reimburse parties for lost expenses then move on to some other label/buy the bad project from another company but I have not actually heard of anyone doing this.

R-6: Many of these record collectors are difficult to cater to and unless you have a certain personality, it isn’t worth it.

I had one customer throw a tantrum at me after he cut his seven-inch record when he opened the box, claiming even after I returned his money that I must put some other cardboard square in the package (said cardboard square from my supplier cost something that would’ve resulted in me having to raise my prices so I didn’t do this and I later got into an argument with this guy on Facebook) to enhance the mailer. This customer is one of those people who do unboxing pictures/videos because they genuinely want to, which promotes the products. This customer also bought/buys a lot of records from others so this was my loss because I don’t have the personality to pamper such people and I usually tell them to buy their stuff elsewhere. Nothing requires me to service these people in the manner they are requesting, however many of these “vinyl hoarding customers” (which do not exist in the numbers people think they do btw) usually demand such treatment in return for their purchases. People are also expecting their products to arrive in pristine mint conditions, which is very hard due to postal transport and while such buying habits are more suited for physical store purchases or concerts, not everything is available there. RAC collectors aside, many of these trust fund kids buying substantial amounts of records (as I mentioned earlier) are also leftists/trans people who will not buy from mail-orders with politics out of alignment with their views. Most customers like to show their products off online without their profiles getting taken down or their friends whining about it so you need to make sure the final product is something that can allow them to do that. Products that are too difficult to resold (this is also why everyone likes colored records) usually turn people away because they want to be able to sell it when they get into an economic jam or if they don’t like the product. A friend of mine has used the word “entitled” to describe these people and I personally find this to be more of metals repugnant moral character rearing it’s ugly head with a more fitting framing being that these customers have a higher standard which if you (like me) lack the personality to deal with this, must alter your pressing or distribution strategy. While I’ll expand on this at the end of this article, most record collectors like to own a band’s entire discography which is difficult if the band has so many releases people can’t consume them all.

It is not my intention by any means to basically take a dump on collectors with the above paragraph and hopefully people will not take any of that out of context. I am not whining that people want their stuff to arrive perfectly, what I am trying to explain is that more attention to detail must be paid to the result in comparison to CDs or Tapes. To effectively deal in records, you must buy specialty mailers, greatly alter your approach and overall require much more dedication to music retail than other formats. I’ve met several people who start doing this and I know based on observations I’ve made that they’re going to basically get bit in the ass in the long term. I’ve lost so far $100 this year alone, due to stuff related to postal zoning issues/using the wrong type of boxes to send internationally that I must write off, and many people aren’t prepared to do that. Plenty of bands also quit in the face of a lot of this too, which is again the meaning of the expression “the crème rises to the top” and ideally, it’s better to figure this all out before you mind up in some kind of monetary related calamity.

R-7: Records are a commodity (luxury goods) that is more susceptible to poor economic conditions than CDs, Tapes or Merch. (FYI, I don’t deal extensively in Merch and shouldn’t be considered an authority on the subject)

I turned Winter Solace into a business to manage all the money for pre-orders relating to one supplier who I no longer distribute records for on the same scale and now am finding myself having to expand into other business ventures to fund my labels activities. Currently the world is currently experiencing an affordability crisis unlike anything I’ve ever encountered in my 36-year lifespan and while the slow recovery means it will be a lasting recovery, it has taken so long that many of the people buying all these records will just move on into other less expensive hobbies. The war in Iran put an abrupt monetary halt to a previous shop update because the price of gas rocketed up multiple dollars per gallon overnight and people have less spending money to buy records. It is also impossible to save money as people are all reckoning with large debt (mostly housing, credit card & medical expenses) and slower price deflation. I never had to care about economic news or personal finance until I started a record label, thankful to The Creator for the opportunity but yeah, not something you think about when pressing black metal records.

UGBM as an “industry” has poorly responded to these bad economic times in a way that is basically like shooting itself in the stomach and while some change should still happen, it will be slow. Many labels are also dealing with the aftereffects of poor decisions when it comes to releasing records & are still basically hungover from the pandemic where everyone thought everything could be pressed onto vinyl for an immediate short-term return. While music media isn’t subjected to import taxes/tariffs the adjustments to the transport/postal systems worldwide have caused more expense and problems then the tariffs will resolve, the American manufacturing climate is also still not conducive to small volume businesses so people will still outsource manufacturing to other countries/migrant workers thus not fixing the problem. Everyone involved originally when this vinyl boom started for UGBM was only focused on quick short-term returns, which ended in disaster as records are clearly designed to be a long-term investment. Currently 10” & 7” records basically are priced out of existence with DLP/45 RPM/single sided 12” inches being the next to go. This has resulted in many customers shifting back to CDs where the profit margins do not leave much room after import taxes, declines in the dollar or people just trying to squeeze the same volume of wholesale income from CDs that they did for LPs. To compound this problem further, much of what is being released now is not the type of products that will attract people who only casually consume black metal or who only buy well-known bands. To their detriment (primarily because there is no major import taxes here in the USA) many labels are tying up releases that people will buy in selective distribution agreements serving no purpose other than disenfranchising wholesale customers dependent on their products to sustain themselves. It is beyond the scope of this article to speculate why these things are this way and people will adapt to these changes in whatever manner they see fit, which creates unhealthy competition that is not beneficial long term.

All this trickles down to a loss of momentum or the inability to build sustained long-term momentum to produce products that would break this metaphorical logjam. The focus on all these extremely limited hard to acquire F.O.M.O (fear of missing out) presses creates short-term, high-risk products functioning like meme stocks, which only have any value upon their immediate release and are already discounted in some cases weeks after their initial release. Early in the pandemic before all this, the focus was taking on bands that created a product worthy of a vinyl release and made an affordable product that everyone could acquire as many of them as they needed for whatever purposes they wanted them for. I suspect that the amount of money made by both approaches is around the same however the short-term option just yields more money immediately but the products usually have no long-term value. Currently under the short-term environment, bands have zero incentive to put effort into producing a quality product worthy of a vinyl release and usually don’t care about the result because it is very easy to get a record deal if you are in contact with the right people. It is also very difficult for smaller companies (some of this is set up on purpose by larger entities because they do not want competition) to expand into record production to provide an alternative to what is out there. Some of these sections may be dated and correct themselves with time, but I feel that the longer-term environment will be better for everyone as those parameters are similar to concepts of stable wealth building which requires among other things a lot of time.

R-8: Many of the various “manufacturing advances” simply don’t work.

This section will be the shortest of all of these because the reality for all of this is that all the invented workarounds for this problem simply do not work. Lathe services (Kunaki in the USA & Elastic Stage in the UK (which I used only to have to pay taxes to the British government, so thus I will be shutting down my account there once I can order enough copies of the Noise Lathe I pressed there)) are generally more expensive to the customers with less of a return for you, despite them allowing for you to press records on demand eliminating almost all the major constraints to getting everything done. While this video needs to be recorded, the clientele many of these DIY/Fly by Night on demand labels prey on, are either too stupid or located somewhere where vinyl records are commonly circulated to understand the difference between a proper record and a lathe record. Record collectors by and large do not order these knock off records as they don’t last very long with a lower sound quality. The same could be said for a new “express” press that a pressing plant we had to stop working with (due to the Tariff laws relating to the country they’re located in) that greatly reduced pressing times and allowed for presses <100 copies, however when I had to repress one of the seven inches we did there, I found a the new version made in the more traditional capacity had a much more noticeable improved sound to it than the express product. While I do suspect that eventually there will be manufacturing breakthroughs to benefit record production, the current group of these new procedures is not adequate to meet the needs of UGBM.

To be continued……