Record Labels Take Another Hit as Amazon Stops Accepting New Physical Media Shipments

Although probably no one will begrudge Amazon prioritizing essential goods and services during a pandemic, the company’s decision to put a temporary halt to incoming shipments of physical media is subjecting record labels — particularly independent imprints that do a good deal of business in vinyl and CDs — to yet another blow.

Amazon has announced that its warehouses has “temporarily disabled shipment creation” for discretionary items through at least April 5. That doesn’t have to do with the outflow of product from Amazon, but inflow. Amazon is declaring an immediate emphasis on the kind of household and medical supplies that have been quick to sell out, and which customers are having a hard time finding in person. Their message to record labels and distributors: Please stop sending us anything, until further notice.

That doesn’t mean that products already sitting in Amazon warehouses won’t still be up for sale to consumers. But replenishing stock, or stocking new music releases, is something that will have to wait for weeks — or, some fear, months.

“Considering Amazon is the biggest record retailer in the world, I have to imagine that all record labels will take a hit,” says Cheryl Pawelski, the Grammy-winning co-founder of Omnivore Records, adding that with “brick and mortar retail under duress at this time as well, I can’t say that the outlook is good.”

“We are seeing increased online shopping, and as a result some products such as household staples and medical supplies are out of stock,” Amazon said in a statement to third-party sellers this week. “With this in mind, we are temporarily prioritizing household staples, medical supplies, and other high-demand products coming into our fulfillment centers so that we can more quickly receive, restock, and deliver these products to customers. For products other than these, we have temporarily disabled shipment creation. … We understand this is a change for our selling partners and appreciate their understanding as we temporarily prioritize these products for customers.”

Other web retailers may be able to step in and fill the gap for labels and customers. Some local record stores that remain open could benefit from Amazon’s shortages, too, although the ability of brick-and-mortar shops to keep their doors open as customers increasingly stay home is in question.

A lack of new physical media for sale at Amazon won’t have much impact on the top sellers of the day. (Stats from Rolling Stone and BuzzAngle Media show that this week’s No. 1 album, by rapper Lil Uzi Vert, was streamed 351 million times but sold just 7,800 albums — all of those digital, since it wasn’t even released on CD or vinyl.) But many smaller labels with constituencies that aren’t satisfied by streaming could be devastated if Amazon turns them away for long.

Lest anyone think that physical media is so diminished in the face of streaming that no one should be concerned about a hiatus, recent stats tell a different tale for how much it means to some labels. A study released by the RIAA in February said that physical sales accounted for just 10% of the music marketplace in 2019. But while CD sales were down 12% for the year, to $615 million in revenue, vinyl sales were actually up by 19%, bringing in $504 million in sales — marking the biggest year for vinyl since 1988. Even as one format wanes while the other waxes, vinyl and CDs together are still a billion-dollar annual business. Or at least they were, pre-coronavirus.

Although the pronounced growth in the vinyl sector has been something to celebrate, the industry has seen a string of bad news stories affecting the future of LPs — all of it having to do with the supply chain, and none of it due to diminishing demand.

“The hits keep on a-comin’,” said the co-president of catalog label Real Gone Records, ruefully, on his Facebook page after the Amazon announcement. The “hits” he speaks of are a series of body blows that include a February fire that destroyed a lacquer production factory in Banning, Calif., one of only two in the world that could produce the material for the master discs that are an essential component in manufacturing vinyl records. Then there have been the problems befalling brick-and-mortar stores as distribution has been consolidated to one company, Direct Shot Distributing, that’s recently become famous even to consumers for bottlenecks that have often kept shops from getting the product they order.

Most recently, as a result of coronavirus concerns, the biggest day of the year for most independent music retailers, Record Store Day, was moved off its April 18 spot and pushed back to June 20. Even a June date for RSD may seem optimistic now, with predictions that carefree public assemblage may not be a regular occurrence again until farther into the year.

A Post Malone vinyl release that was supposed to come out on Record Store Day has now been rebranded as a normal indie store exclusive with an April 24 release date. Other labels sitting on boxes of the 400-plus RSD releases that were announced less than two weeks ago could also decide not to wait for a mass shopping extravaganza to be viable again. But if they did decide to opt out of waiting for RSD and put all those releases out on their own timing, where would they sell them? As of this week, probably not Amazon.

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