Canada Boy Vinyl wants a revolution
Vinyl records are making a comeback. Can Dean Reid’s risky business venture keep pace with demand?
by Jesse Snyder
Photograph Bryce Meyer
Dean Reid has an audacious plan, one that would make him one of North America’s largest manufacturers of vinyl records at a time when demand is soaring. But that’s only if all goes to plan, and Reid is about as green as it comes when you talk about the volatile world of pressing vinyl. Two years ago he was working as a contractor in Calgary; today he’s trying to establish Alberta’s first record pressing facility since the 1980s. “Maybe I’ve got more balls than I’ve got brains,” he says. “I realize that I didn’t know how to [manufacture records], but that’s not going to stop me from learning how.”
His idea is really a bunch of different ideas tied together – a sprawling business plan under his record label House of Pleasant Thoughts that includes a manufacturing plant, a recording studio, a coffee shop, a distribution company and a retail record store. “I’m setting myself up to be a full production house, so I’m trying to cover the whole spectrum,” he says.
He’s doing so at a time when demand for vinyl records is rising. Consumers in the U.S. bought four million new records in 2014, a 42 per cent jump compared to the year before, according to Nielsen Entertainment. In Canada demand grew even faster, with a 68 per cent increase in sales year-over-year. Events like Record Store Day, an annual occasion hosted by nearly 1,400 independent record stores worldwide, have gained momentum in the last few years. Large retailers are also jumping onboard. The U.K.-based retail chain HMV is again stocking its shelves with vinyl records – the first time the company has done so since the 1990s – based on a rise of orders from major music labels.
Despite high demand, history is against Reid. Canada Boy Vinyl is the only record pressing facility in Canada, after Montreal’s RIP-V closed its doors in late 2014. A handful of others have shut down across North America over the past few years: Only 15 pressing facilities remain in the U.S. But Reid says it’s not entirely about the bottom line. A musician and long-time vinyl enthusiast, Reid launched Canada Boy Vinyl not only to turn a profit, but also to introduce a generation of young people to vinyl records. To do so, he’s going to have to navigate a high-risk industry that depends on decades-old machinery, costly replacement parts and secretive supply chains.
Reid was an unlikely entrant into the record manufacturing business. He got the idea to start his company early in the summer of 2013. It was a busy summer – his contracting company had a whole pile of decks to build, and he was overwhelmed with work. He would work long days, then come home and research his business idea, and by August he decided he would go ahead with his plan.
But buying the necessary equipment was more challenging than he expected. Sellers of the old equipment are tight-lipped about their business and tend to be wary of tire kickers from outside the industry. What’s more, nobody within the industry provided him with useful information. “Try to find out how to start up a record pressing plant online, I dare you,” he says. “I mean, the people in the know aren’t talking.” After some digging he finally found a seller based in the U.K. and sent him an email. The response was curt: Come back with roughly $500,000 (Reid won’t disclose exact prices) and a business plan, or get lost.
Reid called a friend and together they drafted a plan, then Reid went hunting for cash. He started cold-calling numbers on his iPhone. “I remember I started on a Sunday, just calling people I had done work for in the past,” he says. “By Wednesday night I had all the money I needed.” The entire exchange took no more than three weeks. “I phoned the guy in the U.K. and said ‘I’ve got it dude; let’s do a deal.’ ” It cost about $20,000 to ship the plant to Calgary. He began producing his first records in June, and, if nothing goes wrong, could eventually reach a capacity of 1.2 million records per year. The process of manufacturing records is often referred to as “record pressing,” but in fact pressing only makes up the third stage of the manufacturing process. Unlike RIP-V, Canada Boy Vinyl also has a cutting lathe, which builds what’s known as a lacquer master (essentially, the original mould of the record) and a galvanics and electroplating station, where the company will make master stampers (the inverse of the lacquer master that is pressed into PVS plastic to make the final product). Live recordings from a studio on the second floor can actually be etched into the lacquer master in real time. Reid’s six presses can each produce about three records per minute.
Photograph Bryce Meyer
These additional capabilities may reduce the disparity between vinyl manufacturing costs in Canada compared to the U.S. – which in the past were as much as 40 per cent higher, according to some estimates. RIP-V, which opened in 2009 and saw major growth in its early years, shut down in part because clients were going through cheaper American suppliers.
But the real question is whether that equipment will work dependably. New record presses haven’t been manufactured for decades, meaning the remaining equipment is old, rare and pricey. “This thing is crazy expensive,” says Reid, gesturing toward his 1974 cutting lathe, situated one floor below his recording studio. “It’s amazing I even have it here.” Replacement parts are hard to come by. Reid recently had to send all the machine’s capacitors to a lathe technician in Michigan for repair. The cutting head, which carves the grooves into the lacquer master, had to be tuned up by a specialist based in California.
“You don’t just whip down to Home Depot and buy one of these things,” he says.
That’s made Reid something like a museum curator, on the hunt for highly elusive – and functional – machine parts. “It’s a very secretive world,” he says. “We follow crazy leads, rumours, stories that we find. It’s like global PI work. It really is a treasure hunt.” His recent purchase of three record presses, which doubled his pressing capacity to six machines, took nine months of negotiations. The deal nearly collapsed near the end, and Reid flew to Germany to salvage it. He’s been to Europe three times for parts.
He has also struggled to find experienced people to maintain the equipment. Most specialists are decades older than the machines themselves, and many live overseas, leaving Reid in constant talks with Canada’s labour office to bring in permanent workers. “Everyone in the business has the same problem, and that’s the equipment,” he says. “If something happens to the cutting lathe, and it’s broken and it’s down for eight weeks, while I’m waiting for parts – or God forbid someone who knows how to repair one – what am I supposed to do about that?”
Photograph Bryce Meyer
The reason for consumers’ renewed interest in vinyl is not entirely clear, but some think it’s partly due to a desire to connect with music through a high-quality, tangible product. “There’s a macro trend going on here, particularly around a generation of consumers who were largely raised and fully embedded in a digital world, who are looking for what I could call authentic experiences,” says Ryan Raffaelli, a professor at Harvard Business School who studies what he calls “re-emergent technologies.”
Raffaelli compares this trend, known as “vinyl revival,” to the re-emergence of the fountain pen or the mechanical watch. When technologies are displaced, they are sometimes replaced by technologies with certain inferior qualities. Audiophiles have long argued that the warm sound of records is superior to digital files, and those old qualities are now being re-realized. Another quality, says Raffaelli, is the community aspect of vinyl. Consumers often listen to records in groups, or meet fellow collectors at events not unlike community league gatherings. “By curating a musical collection through vinyl, it’s actually telling a lot of people who you are,” he says.
But it is not yet clear whether vinyl is here to stay – unlike, say, Swiss mechanical watches, which are again being mass-produced after digital watches nearly wiped them out.
“Typically you have a large capital investment in the actual manufacturing and production process. We haven’t seen a significant capital investment yet to revive production.”
Reid sees demand for records continuing. “I’ve never been worried about being able to sell records or whatnot,” he says. “I knew it wasn’t going to be a problem and we had a pretty strong market.” Canada Boy Vinyl’s ability to meet that demand is the question upon which all of Reid’s other business ventures rest. He is ultimately trying to change the way consumers interact with vinyl. He aims to open a coffee shop at his recording studio where people can listen to records in an atmospheric setting. He wants to start a distribution company that will allow struggling artists to effectively transport records to their fans. He wants to teach his son the ropes so he can carry on the trade. Others might see him as an unlikely businessman, but Reid sees himself more as a man bent on revival, keeping music central to life. “Imagine the world if all the music stopped.”