Everything You Wanted To Know About Those Download Cards in Vinyl Records

On September 22nd 2016

by Ben Munson

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Digital downloads are one of the most useful, and simultaneously most useless, vinyl tuck-ins. Among stickers, lyric sheets, posters, patches and other things flat enough to fit, download cards are probably the most relevant. Still, I have never even used one.

Typically when I open new vinyl, if a download card slides out, it ends up being pushed underneath my turntable and stays there, for eternity. Since streaming services exist, and are relatively affordable, I don’t see why I would bother downloading anyway. I doubt I’m alone on this since Spotify counts 30 million paid users and Apple Music adds another 15 million.

It’s not that I don’t appreciate the gesture of including a download code with an extremely non-portable version of an album. It could just be that most of the music-related futzing I have time for now is dedicated to my record collection and not my MP3 library.

If other record collectors follow my logic, what does that mean for digital download redemption rates? And if digital download redemption rates are low, how do record labels continue to justify the cost and effort that goes into printing cards, inserting them into albums, and hosting the digital downloads for an indeterminate amount of time? And do artists even get paid for digital downloads, or does going to a streaming service to hear their music digitally actually help them more?

Those are the questions we put to a handful of record label representatives and here are some of the answers – both for and against the practice – which we received.

VMP: Why do you offer or not offer digital downloads with vinyl releases?

Patrick Addison, Fat Possum Records

As I literally started to answer your questions, I received an email: "Hi there Fat Possum! My records just arrived and sound great, thanks. "Crappin You Negative" did not have a download card ("one sock missing" did) Can I please get a download code? Keep up the good work."  There are a lot of people just like this customer out there who rely on the download code. I receive these emails often when a download card gets accidentally left out of packaging.  Or it's a pre-order and someone wants to know if the vinyl comes with a download card.  But more than anything, we get email addresses from people opting in their email when redeeming the card. Emails can be added to artist or label newsletters.

Caleb Braaten, Sacred Bones Records

We offer them with all our LPs. We started including them maybe 7 years ago or so when it started to become commonplace. There was a time when it was an actual incentive to buy the LP version instead of spending almost the same money on the download.

Rob Sevier, Numero Group

We did download cards in everything for the last four years… ultimately we looked at all the activity to please very few people. Our redemption rates were usually 5% or less, and that didn’t justify even the waste of paper and insertion.

Mike Sniper, Captured Tracks

As of right now we do, almost more because it's industry standard, to be honest. "Everyone else is doing it" style.

Phil Waldorf, Secretly Group

We offer digital downloads because a small subset of our customers expect them. We want to super serve the die-hard fans who want a physical product and a download bundled together. Our preference is that fans buy the LPs and when they want a digital version, they listen it via a streaming platform (so the artist continues to get paid), but it is not our place to dictate to music fans how to consume music.

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VMP: What does it cost to maintain digital downloads?

Patrick Addison, Fat Possum Records

My unscientific survey of a few invoices revealed a range of $0.20 - $0.40 per unit.  Some download cards are custom which are a little pricier.  Also, the more you order, the cheaper it gets.

Riley Manion, Numero Group

When we created codes they cost .10/ea. That includes set-up, hosting, and customer service for 2 years. There is an additional .05/ea cost for printing them, plus .08-.12/ea for inserting them into the jacket.

Mike Sniper, Captured Tracks

Not much, .25 - .30 cents a unit with our current method, which includes free hosting. But that basically makes the record .75 - .90 cents more expensive to the consumer. Since we're 50/50 w/ all our artists in terms of profit share, all costs are basically x3 wholesale. If that makes sense...

Phil Waldorf, Secretly Group

The cost is surprisingly significant when you aggregate it across all of our releases. You have to print the coupons. You have to pay your pressing plant to insert the coupons. There’s overhead in server space and maintaining the tech behind it all. It’s definitely not a great value proposition, but because it’s fan friendly, we continue to do it.

VMP: What are the redemption rates like?

Patrick Addison, Fat Possum Records

Redemption rates in our catalog vary greatly. Our blues artists for example have a low rate, but that's not surprising. Our physical sales for those titles are much higher than our digital sales. With newer artists, a higher rate is expected. But you're not really going to find many redemption rates over 25%.

Caleb Braaten, Sacred Bones Records

Probably somewhere between 5-20%.

Mike Sniper, Captured Tracks

Depending on the release, 10-25%. Lower and lower all the time.

Phil Waldorf, Secretly Group

Very low and continuing to drop.

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 VMP: Have labels considered alternatives to digital downloads?

Patrick Addison, Fat Possum Records

Of course it's a discussion. There is a cost involved with supplying cards for a small percentage of customers who use them. But until streaming services become the new norm, I don't see them going away anytime soon. I still like that we get direct customer email addresses. It's a great way of finding the fan that hasn't wandered onto the label or artist websites.

Caleb Braaten, Sacred Bones Records

I've heard a few things. Putting information on the packaging about writing the label if you want a digital version was one idea I've heard. The more and more that people are going to streaming services to listen to music the more I hear people talking abut abandoning the idea of a free digital download entirely.

Rob Sevier, Numero Group

When someone buys a record on our site, they get an instant download. This works pretty well and has addressed most of the demand.

Mike Sniper, Captured Tracks

Honestly there are so many free/cheap streaming alternatives, including YouTube, it's kind of hard to reckon with a decision to pay for software to host your own or a free redemption buildout with pre-order. There are so many facets with running a label, everyone is already so busy doing so many things with each release, it's a bit maddening to consider adding yet another step. I'm sure someone will come up with some new system, like using your smartphone to scan the barcode on the LP and then it's on your phone, but then anyone can do that who walks into a record store and steal a bunch of records digitally.

Phil Waldorf, Secretly Group

We have, but my suspicion is that it’s phasing itself out without us reinventing the wheel. Downloads themselves are being overtaken by streams, and along with that will be the phasing out of digital download cards.

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