So apparently EMI announced that they’re going to be releasing several albums on vinyl on August 19th of this year, including stuff by Radiohead, Coldplay, the Beach Boys and John Lennon. Indie kids everywhere are rejoicing (or are complaining that EMI is simply trying to earn a few bucks for the shareholders) whereas some analysts wonder if this is a good decision financially. There’s talk of vinyl being “brought back” in a time where physical media seems to be going away… but the truth is a lot more simple than this. Ready for it? 

Supply and demand. Yeah, it’s that simple. Let me explain.

In the past, entertainment companies have always stuck by one format per medium at a time. For example, music was distributed on vinyl until cassettes came out, stayed there until CD’s, etc. Very seldom was there a release that came out on tons of formats at the same time. It’s easier for the entertainment industry to adopt one thing and stick to it. But in this era of long tail economics, where niche markets are being served regardless of how small they are, entertainment companies can no longer get away with such a one-dimensional distribution model.

There is a certain segment of the population that likes vinyl. It’s not massive, and therefore the entertainment companies would’ve never thought to support it until now. But it is big enough to turn a profit on top of whatever it would cost to cater to that market, and therefore it is worth doing. In order to saturate the market these days, you need to provide your media in ways that people want it in rather than a singular “industry standard” that makes most people happy but provides no outlet at all for the rest of us. Adding a select few popular albums on vinyl is a way to make that market happy. It will never replace CD’s or online distribution, but it will make a very high-margin group of customers happy. Did I mention that the vinyl crowd is willing to shell out major bucks for this stuff? Yeah. My guess is that EMI will see extremely high margins in this sector.

Lastly, this is an incentive for hardcore fans to buy more product, even if they already own the CD. This is exactly how Nine Inch Nails earned money on their last couple albums despite giving them away as free downloads. They offered “premium” versions of the products (which included the album on vinyl) that cost a lot of money. And it worked. NIN sold out of these premium products, and ended up with a sum of money comparable to the amount they would’ve gotten from a traditional record contract.

So is vinyl the next big thing? No. But the concept of alternate distribution is.