cmalak
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- Apr 10, 2013
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- #1
...Pressed to the Edge: Why vinyl hype is destroying the record
It's interesting because if the supply tightness is so pronounced in so many steps of the value chain in producing a vinyl record, you would assume that capital would come in and invest in new lacquer cutting machines/heads, electroplating, and vinyl printing/pressing machines. Where there are excess profits to be made, new capacity/supply often comes in but my guess is the capital required to design and manufacture new machinery still does not see a big enough market to justify the investment required. So the vinyl market, while growing and stressed by the current levels of demand, is not big enough to attract new investment, and if participants don't believe that this rebound in demand is sustainable and is more of a fad likely to fizzle out over time, then new capital is unlikely to materialize to invest to supply badly needed new machines in all the phases of production of a vinyl record (lacquer cutting, plating, pressing/printing).
It's interesting because if the supply tightness is so pronounced in so many steps of the value chain in producing a vinyl record, you would assume that capital would come in and invest in new lacquer cutting machines/heads, electroplating, and vinyl printing/pressing machines. Where there are excess profits to be made, new capacity/supply often comes in but my guess is the capital required to design and manufacture new machinery still does not see a big enough market to justify the investment required. So the vinyl market, while growing and stressed by the current levels of demand, is not big enough to attract new investment, and if participants don't believe that this rebound in demand is sustainable and is more of a fad likely to fizzle out over time, then new capital is unlikely to materialize to invest to supply badly needed new machines in all the phases of production of a vinyl record (lacquer cutting, plating, pressing/printing).