In the News

Not Quite the Vinyl Countdown

Graham Watson

3rd January 2017

Really interesting article here about changes in consumer tastes - with sales of vinyl at their highest since 1991 and vinyl sales outstripping digital downloads too. However, there's even more depth to the economics in the article than this.

A simple question to ask would be to estimated the cross price elasticity of demand for vinyl with respect to changes in the price of digital downloads. I suspect that many people would assume that the two are substitutes.

However, to my mind, the article implies the opposite; the two may well be complements - the real music fan is likely to want both access to the song on every device - i.e. the download - and a 'hard' copy of the LP too. Factor in streaming services, and it means that the market it more complex than first meets the eye.

In 2009, vinyl albums accounted for 0.2 percent of all album sales in the UK, and this figure rose to 2.6 percent in 2015.

Graham Watson

Graham Watson has taught Economics for over twenty years. He contributes to Tutor2U, reads voraciously and is interested in all aspects of Teaching and Learning.

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