Posted on bloomberg.com, April 22, 2016
A Turntable Maker Tries to Spin Upmarket
Crosley is trying to move beyond entry-level record players.
Crosley C10,
At the South by Southwest festival in March, an Urban Outfitters store in Austin invited aspiring musicians to come and cut their own singles. Stepping into a dressing room, one young rocker picked up a guitar, leaned into a microphone, and began to sing: “Time is money, when you’re living funny. But a smile will pass you by.” The tune was simultaneously being etched into the grooves of a plastic record. Then the song was played back on a minimalist turntable called the C10.
With its wood veneer base, adjustable tonearm, and high-end Ortofon OM 5E cartridge, the C10, priced at $399.95 and up, is Crosley Brands’ attempt to move beyond the market for entry-level record players, which it dominates. Crosley is also the world’s No. 1 turntable brand, with 1 million sold each year.
Modern Marketing Concepts licensed the trademark from a defunct Cincinnati home electronics company in the 1980s, and the products initially evoked this retro heritage, with radios, CD players, telephones, and other components made to resemble antiques, often with a turntable slapped on top. By the mid-1990s, Modern Marketing, whose headquarters are in Louisville, was selling 20,000 turntables a year through outlets such as Sears, Kmart, and QVC.
In 2001 the furniture retailer Restoration Hardware commissioned the company to produce a set of custom briefcase Traveler turntables. The models sold well. But the real revelation was that the customer was younger, female, and completely new to vinyl—in other words, the opposite of the consumer Crosley had long targeted. (Record makers have also taken note.) “These things didn’t have to be for that older crowd that still had records in their basement,” says Bo LeMastus, chief executive officer of Crosley Brands. “This was an audience going out and buying vinyl.”
The company rejiggered its offering to cater to this new generation of vinyl consumers, churning out a dozen or more designs each year, in different shapes and colors, customized for different retailers. Business picked up, propelled by vinyl’s comeback: U.S. sales of new albums topped 12 million in 2015, up from a low of 900,000 in 2006, according to Nielsen SoundScan.
Unlike more expensive stereo equipment, most Crosley models are plug-and-play, requiring no external speakers or amplifiers, and cost $100 to $200. “They are good turntables at a really affordable price,” says Rachel Albright, director of creative marketing and content at Urban Outfitters, the youth-oriented department-store-chain that’s one of Crosley’s biggest accounts. Jeff Barber, owner of Toronto’s largest record store, Sonic Boom, says that trying to steer customers away from Crosleys to better-quality turntables is a losing battle. “They’d just point and say, ‘I want the pink one.’ ”
The global turntable market is increasingly segmenting into different price points, says Heinz Lichtenegger, CEO of Austria’s Pro-Ject Audio Systems, which designed and manufactures the C10. If Crosley adds more expensive models to its lineup, it may succeed in getting a good portion of the 5 million who own one of its lower-priced players to trade up. To succeed, the brand first needs to convince its numerous critics that it can make a turntable that sounds as good as it looks. That’s what the C10 is for. “We want to put this in front of the haters,” says Jason Menard, Crosley’s new head of marketing.
Michael Fremer, who runs the stereo equipment review site AnalogPlanet, calls Crosley’s inexpensive turntables “groove chewers,” because they use cheap needles and heavy tonearms. “So these kids are buying these records, but maybe they want to play records in 10 years, and it will sound like bacon sizzling,” he says. In March, Fremer positively reviewed the C10, noting that it could bring tens of thousands of Crosley customers into the audiophile market.
Menard, who previously worked for Zappos.com and Warby Parker, is building relationships with record labels, bands, and music festivals to give Crosley more “street cred” in the business. The company also plans to open a record pressing plant later this year where it will manufacture limited editions for retail customers. Says LeMastus: “We’ve been making razors all these years, we thought we’d get into the blade business.”
The bottom line: With the C10, Crosley hopes to upsell the 5 million record lovers who already own one of its turntables.
