Discogs Achieves Sound Of Success In A Dying Marketplace

17. September 2017.








If you thought the iPod killed physical media years ago, think again. Sure, Nielsen reports that physical media sales are down (again), but one music marketplace is doing so well it was just able to launch four new marketplaces: one each for film, comics, books and posters.

Those are in addition to the music gear marketplace it launched in the spring selling audio equipment – everything from synths, effects pedals and turntables to gentle brushes and cleaners specially designed to care for vinyl records.

That marketplace is Discogs, and its spinoffs – Filmogs, Comicogs, Bookogs, Posterogs and Gearogs – are all still in public beta. Discogs operates as an online, crowdsourced avenue through which individuals can list their popular and rare audio recordings for sale. Each new listing adds to the overall database. The spinoff marketplaces will follow the same business model with their respective wares, touting zero seller fee charges for as long as they’re in public beta.

After surpassing five million artists and 8.5 million recordings in its database in June, Discogs aims to have a total of nine million releases catalogued on the site by the end of the month.

The marketplace reported sales of nearly 4.6 million records in the first half of 2017, generating an estimated $100 million in sales the previous year, according to Billboard. With its eight percent sales fee, that totals approximately $8 million in revenues – not too shabby for a business that began back in 2000 as one man’s venture to catalog his extensive collection of vinyl records.

Those are some big numbers for a supposedly dying industry. So, why is Discogs growing while record stores – and, allegedly, physical media altogether – are dying?

Current Climate

Forbes reports that Discogs owes its success to the vinyl resurgence and, though some millennials may not want to admit it, to big corporate retailers as well. It’s players like Urban Outfitters and Whole Foods, not mom-and-pop record stores, that are driving the vinyl boom by marketing records as part of an organic lifestyle. By lumping vinyl into a lifestyle that includes other holistic choices in fashion and health, these retail heavyweights have (perhaps deliberately) spawned the next generation of physical media enthusiasts.

There are plenty of digital platforms offering millions upon millions of songs, albums, artists and pre-curated playlists – Spotify, Apple Music, Google Play and Pandora, to name a few. For the enthusiasts, collectors, completists, discoverers and trendsetters, though, these platforms don’t go far enough.

So, while brick-and-mortar music stores may have struggled as the majority of consumers made the digital shift, Discogs recognized there were still people who wanted more out of their music experience – and that there probably always will be.

Business owners in other retail categories can learn from this. It’s not enough to pinpoint the major trends. What eddies have formed off the mainstream? Who is being underserved? Can their products or services be re-branded or associated with forward-moving trends to win over a new generation of consumers?

It’s time to say goodbye to the category equivalent of mom-and-pop record shops and time to usher in the future. Phil Leigh, a media industry analyst, predicted the record store of the future will look less like a record store and more like a hip, music-focused Starbucks. How could this translate into apparel, electronics, home goods and other types of products?

Know The Audience

Amazon, eBay and others sell vinyl, too, so what makes Discogs different? Its shoppers aren’t just looking for Ed Sheeran or the La La Land soundtrack, although some are. Most, however, are in search of older albums and rare releases. They aren’t discovering new music, but are instead adding to a collection with nostalgic value.

A report by Comstock’s magazine said that most retailers get it wrong when it comes to the up-and-coming market. They’re glutted on instant gratification. It’s not millennials, but older generations that want everything to be fast, the report claimed. Meanwhile, it pointed out, young adults are drawn to vintage equipment, because it forces them to slow down and interact with something tangible in a world that is often overwhelming.

These shoppers are looking for music they heard first in a video game, a Netflix movie or a DJ sample used in a popular modern song. New releases aren’t their goal, although Discog’s mid-year report suggests that could be changing, with new release sales up more than 120 percent.

Collectors have specific wants and needs, and that’s been true so far with Posterogs and the other new marketplaces. So, the biggest lesson retailers can learn from Discogs is perhaps that in the long run, it doesn’t work to push just what they want to sell. Rather, it’s important to pay attention to what the consumer wants and adapt the inventory and business model accordingly.

Like its customers, Discogs seems to have placed a high importance on listening.

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