Producing vinyl has long been an obscure, nearly esoteric process fraught with endless manufacturing delays, unclear market demand, and clunky distribution. Artists and labels often struggle to find someone to help them prepare and press their records, shouldering the considerable costs themselves. They then have to deal with weeks or months of waiting, with no guarantee of quality, in hopes of making back their investment.
Until Qrates. Combining the power of crowdfunding with just-in-time production and expanding distribution channels, the Japan-based company has figured out how to collapse the value chain and make on demand vinyl work for the niche and indie artist. “We are analog on demand,” explains Taishi Fukuyama, Qrates’ Chief Marketing Officer. “There is real demand for small-batch vinyl with world-class turnaround and pressing quality.”
Balancing the supply-chain complexities with tech savvy and musical passion, the company aims to change the way we buy and make vinyl. Within minutes, an artist or label can launch a campaign on the site’s intuitive interface, using the easy vinyl simulator to upload mastered files and artwork, and to select a cool vinyl color. The pricing for each option is instantly updated, so you know exactly what to expect costwise. Once the project is published and has the proper number of supporters, it’s time to press. If you want to get the records shipped to you, Qrates takes 15% of the total earnings. If you want Qrates to mail records out to supporters, it’s 20%.
Qrates sprang from the dance and electronic scene, where small-run vinyl has long been an important distribution channel. Qrates’ founder and CEO, Yong-Bo Bae, was a long-time club music fan, with diverse tastes. “Being crazy deep into the culture, as a very music-oriented group of people, we have always been into vinyl,” explains Fukuyama. They weren’t alone: Though CDs still dominate the Japanese market, many Japanese music fans are obsessed with vinyl collecting, and many rare, sought-after LPs have only been available in Japan.
With this passion driving them, developing Qrates’ online side was easy for the seasoned team. Yet they had to ease one of the music business’ current pain points: the limited manufacturing capacity for vinyl, the worldwide shortage in pressing plants. The logistics maneuvers start the moment a project is published on the site. “When you hit publish, we start ingesting the information,” Fukuyama notes. “When we see you’ve reached a certain threshold of support, we contact our manufacturing pipeline. We’re very selective about our partners, and we’ve built a network of suppliers we know and trust, because we do not compromise on quality.”
The Qrates crew took an approach similar to load balancing, spreading the workload across several producers, the way computation can be be distributed to several servers. “When one plant looks like it’s near capacity, we reach out to our other partners and get them rolling,” says Fukuyama. “This distributes the burden, and makes sure we can keep our turnaround short.” Qrates also sends work to the plant that is closest to the records’ final destination, to reduce shipping costs.
Once a project is published, Qrates offers it for sale in its online store and can also add it to its wholesale catalog, where retailers that work with Juno (UK), Fat Beats (US), HMV (Japan), and Technique (Japan) can order Qrates vinyl. “We’re always pushing to expand the ways artists can get their vinyl into more places,” says Fukuyama. “Retailers can contribute to projects, and artists can get their records in stores without a distribution deal.”
The blend of digital tools and analog know-how plays to the new music industry’s strengths, while avoiding its pitfall: the cost of licensing music from rights holders. Qrates only presses music when told to do so by rights holders.
Though each project has a limited run and may appeal to a niche, the overall model promises a broad, long-term sustainability that is encouraging in a very mixed picture of the music business, writ large. “Music tech has been shunned by investors lately, due to the high licensing risk. We don’t deal with any of that. We have a strong connection to the two growing formats in music, vinyl and streaming, because many of our artists are being discovered on streaming platforms like SoundCloud, Spotify, and others” reflects Fukuyama. “With streaming, you have the component of scale and its benefits if you’re an investor. If we’re speaking, on the other hand, about revenue for labels and indie artists, vinyl has equal opportunity for return in the mid to longer term.”
Qrates is an on demand crowdfunding platform powering the future of music on vinyl. Through its intuitive online platform, QRATES gives artists, labels and brands the tools to design, fund, press, sell, fulfill and distribute their vinyl within minutes to customers and retailers worldwide.