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If You Want to Sell Christmas Music, Put It on Vinyl

PORTLAND, Ore. (TheStreet) -- The holiday record collection at my house isn't large, but it's carefully curated.

A 180-gram Rhino reissue of John Coltrane's My Favorite Things shares space with the $3 thrift store Bing Crosby compilation I Wish You A Merry Chrismas. A pristine Fantasy Records release of the Vince Guaraldi Trio's A Charlie Brown Chrismas is sandwiched between copies of Phil Spector's A Christmas Gift For You and a $5 Firestone tire shop collection of Christmas classics -- with a copy of the 1987 charity compilation A Very Special Christmas coming soon. Prized above all, however, is my mother's copy of Barbara Streisand's strange and wonderful 1967 gem A Christmas Album that rang through the halls of our childhood home in Kearny, N.J.

There is no version of Jingle Bells quite like Babs' manic, one-woman Vegas show version of Jingle Bells.

To me, those albums are holiday music in its purest form. They are, in many cases, the versions of that music that listeners in the U.S. grew up with. Their rich tones or, at worst, their hisses and pops are indelible grooves in the holiday soundtrack that lose just a bit in the trip from the cassette deck to the digital file. They're also the music industry's last, best chance to get anyone to pay for their holiday nostalgia in any form other than a streamed channel or playlist.

As we've mentioned before, Kelly Clarkson, Mary J. Blige, Jewel and Bad Religion are putting out holiday albums this year just as the market has soured on them. Last year, Nielsen  (NLSN) Soundscan reported a 7.1% drop in album sales between Nov. 5 and Dec. 30 from the same period a year before. The holiday music genre, meanwhile, saw its digital track sales drop 12% from 13.7 million purchases in 2011 to 12.1 million last year.

Holiday albums aren't alone in their troubles, but they're just making a blue Christmas for music even more dreary. Though overall music sales rose 3.10% last year, according to Nielsen, total album sales dropped 4.4%. The problem is that even as digital track sales improved 5.1% and digital album sales rose 14.1%, the fading compact disc still matters way too much to the modern music market.

Sales of CDs have been in steep decline for years and plummeted 13.5% in 2012. However, of the 316 million albums sold in the U.S. last year, 193 million of them were on CD. Digital album sales are climbing, but they still trail CD sales by about 75 million copies. In the first half of 2013 alone, CD sales outnumber digital album sales 78 million to 61 million, with total album sales dropping 5.6% overall from the first half of 2012.

With streaming activity up 24% during that same span, there's only one target audience worth trying to sell a physical album to from this point on: The vinyl lovers. Vinyl LP sales jumped 17.7% in 2012 after growing a whopping 36.3% in 2011. Though they only accounted for a tiny 4.6 million of the 316 million records sold last year, they're basically the craft beer of music: Artists and labels can charge a premium for them based on their limited quantity and perceived quality.

As a result, like craft beer sales, vinyl album sales just keep rising. In the first half of 2013, vinyl sales jumped 33.5% to 2.9 million albums. For perspective, that's more vinyl LPs than the music industry sold in all of 2010. Credit Daft Punk for a big chunk of that increase, as their top-selling Random Access memories nearly equaled the sales of the next two albums -- Vampire Weekend's Modern Vampires of the City and Queens Of The Stone Age's Like Clockwork -- combined. However, the rest of the Top 10 is strewn with releases from Mumford & Sons, The Lumineers, The National and Postal Service that each evoke a nostalgic, throwback sound of their own.

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