Format Shifts: New Products for Music Fans
What happens when music becomes more than something you stream, but instead something you can hold? This week, we’re wrapping up the Rising Tide miniseries with the 8th and final revenue multiplier: new products for the music buyer.
First, Jennifer Sullivan of KiTbetter explains how the KiTalbum pairs a physical collectible with a digital experience. Then, Jaime Marconette of Luminate breaks down the latest trends in physical music, including the rising interest of CDs and the emergence of Smart Media. Finally, Tarun Nayar of Modern Biology returns to talk about how he turned the experience of his music into an instrument, and what he’s learned from selling that at shows instead of just a vinyl or t-shirt.
This episode is part of the Rising Tide miniseries, working through the revenue multipliers that grow the value of the music industry, and building toward this year's Music Tectonics Conference theme in Santa Monica this October. Get your tickets now
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Episode Transcript
Machine transcribed
Jennifer Sullivan
[00:00:00] Dmitri: Jennifer Sullivan is a marketing futurist and music industry executive who spent her career at the intersection of culture, commerce, and connection, with a particular focus on fan behavior, music ownership, and emerging business models. As President North America and Chief Marketing Officer at KiTbetter Jennifer leads global brand strategy, market development, and international growth for the KiTalbum, which is a patented hybrid physical and digital album format reshaping how music is experienced.
We'll get into that. But the KiTalbum pairs premium packaging and artist-curated collectibles with music videos, photos, lyrics, and more expanded fan experiences. And under Jennifer's leadership, KiTbetter has expanded its North American presence, including the launch of a Los Angeles manufacturing facility.
Since releasing the first connected album in 2014, KiTbetter has sold more than 10 million albums worldwide, which is really cool. Welcome to Music Tectonics, Jennifer.
[00:00:56] Jennifer: Thank you for having me. I'm very excited to be here.
[00:00:59] Dmitri: Yeah. I am too, 'cause you're filling in a piece of the puzzle for us. During this Rising Tide miniseries, we've been focusing on eight tech multipliers of revenue for the music industry, and we've saved this new product types category for the end here.
Kind of a little bit weird, but it's so straightforward in some ways, and yet I think we'll, put a spin on it. I was certainly thinking about physical form factors, vinyl and beyond, as well as digital products, marketplaces, more ways to sell music to consumers and to creators. But for this episode, let's focus on physical products in a streaming era, because KiTbetter's the perfect use case of a physical and digital product.
So I wanna dive in with a question for you. How big is the market for physical sales in recorded music, and what's driving growth in that area, Jennifer?
[00:01:43] Jennifer: So physical music is already a substantially global business. you know, if you think about, the K-pop industry where our business started, in Korea, physical still outpaces, you know, in terms of fandom revenue, a lot of the, you know, even streaming revenue.
so it's, definitely still a very significant part of the business. in the world, you know, it's, I think it's 5.3 billion globally, in 2025, which was up 8%, according to IFPI. Um, and obviously vinyl, everyone's heard about, you know, the story of how vinyl has had this resurgence, which, you know, it's always been there.
It's continued to grow. there's just been more movement around that. it's grown 13.7% globally. I did my research. and, you know, CDs are even up, 3.5-7%. So, you know, when I first saw the KiTalbum, I was really excited because I liked the idea that, you know, we're continuing to think differently about how music is experienced.
and it doesn't have to be one way or the other. It doesn't have to be physical or digital. And you mentioned like streaming. You know, I think there's a lot of advantages to streaming for artists for discovery and for, you know, being able to, find audiences in places that they otherwise wouldn't have found audiences or have insights about how people are listening to their music.
with physical media, obviously there's an emotional connection that you have when you buy, something from your favorite store, you discover something, or you go to a venue and you, you're able to take a souvenir home. So I think, you know, physical purchases are so important, and it was almost like, you know, it never went away.
I think it's almost like now the script has flipped a bit, where I think the digital side is starting to try to keep up with the physical side because you can't replace that connection that you have from something that you collect. and when you wanna support an artist, be it a, you know, a ticket to their concert or a, T-shirt or an album, you know, those are something that are part, it's part of your life.
It's something that you associate with that moment of your life. you know, I think streaming solved for, accessibility. You know, everyone can release, on streaming. Um, you're kind of seeing it with AI now. Anyone can create something using AI. but it's, different when it's, you know, it's, something that's coming from the heart and the soul and the, you know, it's something that you're supporting.
so I think, you know, people put value into music, that they believe comes from a place of craft. and that's what physical is. I think physical is, is all about the craft and the consideration that goes into the packaging and the design, the photography, and, you know, everything that goes into the album that the artist is already creating.
And now layer in videos and, you know, other kind of multimedia formats that you can deliver via digital. Uh, it just takes it to another level. so I think physical is, you know, it's gonna continue to grow. I think it's really exciting to think about what physical plus digital can do.
[00:04:30] Dmitri: Right. I wanna get into that with you, but first, I wanna put this through two other lenses 'cause, I think you have a lot to offer partly, just because you're introducing this new physical form factor and you can see how audiences and fans are reacting, and also because you're working for a South Korean company and there's some interesting things happening in Asia that I think we can learn from here in the U.S.
But before we get to the Asia question, I wanna talk about the generational one.
[00:04:54] Jennifer: Mm.
[00:04:55] Dmitri: It-- Like, when vinyl s- really started to have that resurgence originally, it seemed like nostalgia was kinda driving that growth, and then even the growth of cassettes and zines and, you know, just this whole retro kinda feel to it.
[00:05:09] Jennifer: Mm.
[00:05:09] Dmitri: Which, which is kinda funny because Gen Z, they don't actually have the nostalgia. It's, it's some sort of, like, genetic memory because they haven't actually lived it. But it seems like some people are rejecting streaming as the only way to listen to music. What's happening with Gen Z as it relates to streaming and digital music?
[00:05:25] Jennifer: Yeah. I, I'm completely aligned on the nostalgia was, you know... what people have kind of identified as the reason that people were kind of opening their minds to physical music. But I think it goes beyond that. I think it was, you know, this craving for some kind of connection to their, you know, to the artist and supporting the artist and being on the right side of history.
I think, you know, a lot of fans are more aware now of, you know, what the revenues are for artists and, you know, how they're being supported. I think that there's also something, like a badge value that comes along with physical, that, the fans are kind of looking for as well. You look at, like, you know, how, often fans are buying T-shirts or they're, you know, putting their favorite artists, you know, as a keychain or whatever on their, on their bags.
you know, they, wanna show off their fandom. It's about community. So I think that, what's interesting is, you know, obviously people are buying a lot of physical. We see, like, Gen Z, millennials buying CDs. They don't own CD players. you know, there's, all of those stats.
That's starting to grow. I've heard, like, all kinds of data from Luminate that says that, you know, the millennials and, Gen Z, are definitely starting to now catch up with the actual players with their-
[00:06:32] Dmitri: Mm
[00:06:32] Jennifer: ... their physical collectibles. but I don't think... I wouldn't say that they're rejecting streaming.
Like, I, I think, you know, streaming is always going to be there now. I think it's part of how they understand discovery and they understand music. so I don't think it's necessarily a changing off for, from streaming to physical. I think it's just adding on.
[00:06:50] Dmitri: Mm.
[00:06:50] Jennifer: And I love your rising tide. I think that that idea that, like, you know, there's different occasions for listening to music.
you know, when you're going out for a run or you just want something in the background, you know, streaming's really great for that. but when you're having a more intentional listening experience, when you wanna sit down and absorb the music and, and understand it and, you know, maybe read through the liner notes and do all of those, that's where vinyl and CDs and, you know, hopefully KiTalbums will be part of that story.
So I think that's what the Gen Z is looking for is just a deeper dive, into the rabbit hole that the artist created for them with their project.
[00:07:23] Dmitri: I love that you kind of talked about this being in addition to, because on one of the earliest episodes in this miniseries on "Rising Tide," I spoke with a publisher, Monica Corton, with the question of what comes after streaming.
And I keep asking these questions, and I get these, like, right angle answers where I'm like, "Oh, wait. Is that what we meant?" Because, you know, you look at the format shifts from vinyl to CD to downloads to streaming, and you think, "Well, something's gonna come after streaming." But the answer that she gave me, which I think is in line with yours, is that no, streaming is the new floor.
It's not the end. It's not like we're transitioning to another format. It's that there will be additive things on top. So I like thinking about these revenue multipliers in terms of they go on top of what's already brought us here. Yeah. Now let's flip to the question about Asia and Korea. What's happening in Korea and Asia as a whole that could be an indicator for what might be heading towards America, Latin America, and Europe?
[00:08:17] Jennifer: Well, obviously, we've seen a lot of Luminate reports about K-pop fan culture, and being a driver for a lot of the smart media album format now is-- a lot of that's coming from trends that they're seeing coming from Korea, from Japan, where I think it was something like in 2025, that region of music represented 45% of global physical recorded music revenue, which is an incredible number.
It's because music is still all about the collectibles and the packaging and the digital experience of the community and the storytelling. I wouldn't say it's something that can work and just replicate the exact same thing in each individual market. I think that's what we were really discovering. It's been fascinating to see how fan cultures engage with physical media differently in each market.
think genres of music also dictate that. But if you think about hip-hop and rock and metal, these are categories where there are definitely fan communities and people that it's how they define themselves as a human is the artists that believe in and support. So I think it's the same kind of fanaticism that I think fandom is based on.
It just needs to be tapped in different ways. So think the idea is not about copying K-pop, it's about understanding fandom and understanding each individual fandom. That's the job of the artist to kind of craft their community, what feels authentic to them, what price makes sense, where their fans are going to shop, all of those things.
think it's-- And then it comes down to execution, and does it make sense for that to be in the form of a vinyl record? Does that make sense to be a CD or a kit album? It's not about copying what was done in Korea, but understanding what drives that fandom and that building those fan communities, I think is-- It's definitely something that we're building on top of, and I think there's a lot of learnings to be had.
And I think that's what the industry is starting to adapt to, seeing that these are very lucrative businesses. And if artists can take some learnings from those and then also adapt them to their own culture and to their own genres, that's the win
[00:10:31] Dmitri: Yeah. So KiTbetter has this format called the KiTalbum that you've invented. It's a new form factor physical product, but you say physical and digital. We've kind of referred to it, but let's talk about what is it and how does it work?
[00:10:42] Jennifer: So a KiTalbum is a collectible. it's artist designed. It's a hybrid of physical and digital. so the easiest way to understand it is it's about a complete album experience. So like I said before, artists take a lot of time in developing the artwork and the music and everything that goes into an art, an album.
and so we've, made that into a keepsake box. so depending on the release, that can include the artwork, the photos, the credits, the stickers, liner notes, lyrics, whatever the artist wants to include. and then it comes with this pocket-sized Kit device. so our technology is an ultrasonic technology.
we have our own patented technology that doesn't require NFC, it doesn't require Bluetooth. All you need is a microphone, which your phone, your tablet, any of your smart devices have, and you just click the little button on the top of the, Kit. Um, it stands for Keep In Touch, by the way.
The K- Kit stands for Keep In Touch. Um, you click the little button and it activates the album on your Kit player. Kit player is available for iOS and Android. and then you're inside a digital album experience. And what that means is that you've got your music, your videos, your photos, your lyrics, everything all in one place.
we can deliver lossless audio, Dolby Atmos. we have a partnership with Dolby globally. we're working on Dolby Vision as well, so the video components can be high resolution as well. so the idea is to kind of create something physical that is meaningful that you can put on your shelf like I have right here, that looks great together with all of your other, album collection.
And then you also have something digital, that you can collect, that you can return to, and that can, you know, evolve over time potentially as well. So, you know, the other thing that's really interesting about the KiTalbum is that it is, digital. So, you know, as technology changes, as things become updated, you know, we can typically improve upon the recording.
we didn't have Dolby available to us, two years ago. we weren't Dolby Atmos, capable. But, once we had Dolby, we were able to upgrade all of our Duran Duran albums that we released, two years ago to Dolby Atmos for all of those fans. So those sorts of things can happen when you're playing in the physical/digital space.
We can also have artists deliver us music very late in the process. So a lot of times, you know, the physical we can get, you know, maybe 30 days before, but the digital can be updated within a, a week. so if music's coming in late or videos are coming in late, which we know in the industry things like that happen all the time, we can be a little bit more flexible, than a, traditional physical format.
[00:13:12] Dmitri: Well, and you can't update vinyl. You can't put a remix onto vinyl. You can't, do a cover song on a vinyl. You can't do a bonus track after the fact and then throw it onto the vinyl, but you could do it inside the Kit album. Is that right?
[00:13:22] Jennifer: Right. Yeah, absolutely. Now, we have limitations when it comes to this new smart media format with Billboard, so we are very sensitive to making sure that-
[00:13:30] Dmitri: Mm
[00:13:30] Jennifer: you know, if an artist wants their album to chart, um, it'll have to follow some strict guidelines in terms of updating after the fact and those sorts of things. But yeah, it's... I mean, I- like I said, I think flexibility is something that we're really proud of, being able to produce in a fast amount of time, being able to update the assets on the digital side, later in the process.
you know, there's, there's a lot of opportunity for innovation, and, that's what I'm really excited about.
[00:13:56] Dmitri: Tell us about the Billboard charting thing. We haven't talked about that. how does this relate?
[00:14:00] Jennifer: So about, a week ago, maybe two weeks ago, Billboard announced that it has included a new category, the smart media category.
This is, the first time since, I think it was like 1999, when Luminate, included the CD as a new physical format. This is the first time that there's a new physical format category, and the physical format category is called Smart Media Album. Smart Media Album is essentially a connected album, an album that includes a physical component as well as a dedicated digital component.
I say dedicated as in it doesn't just connect you to a streaming platform or, a website. It actually directs you to some kind of dedicated digital experience. And, it's exciting because it's starting to think a little bit differently about what music formats can be and how fans are engaging with music.
it includes about seven companies. KiTalbums are one of those companies in this first cohort of companies accepted, to be submitted by artists. And as of next week, which will be October 2nd, I don't know when this is going out, but, as of Oc- the week of October 2nd, there will be chart-eligible Kit albums that will be introduced and that will contribute towards, the, you know, charting, for Luminate, across all of the different Billboard charts.
[00:15:13] Dmitri: I guess they see some potential here if they're gonna start measuring it, that it could actually have a, an impact, which is pretty cool. I'm curious, before we move on, what are some of the most creative use cases of Ki or other new form factor listening products? What are some examples of things that artists have done with the format?
[00:15:30] Jennifer: Yeah, this is-- I mean, I'm a creative executive. I, I love getting creative with artists. I think our Jimi Hendrix album is one of my favorite examples, where we were able to take, you know, obviously one of the most iconic historic performances of all time, Jimi Hendrix live at Woodstock, and bring that into a physical digital format, where it's the f- it's the performance that we all know and love, but it also includes archival footage.
It has an interview with, the engineer Eddie Kramer talking about recording Woodstock, and then it has all of this, like, really cool collectible stuff inside. Um, we partnered with Dunlap guitar picks, um, so we have, like, a special custom guitar pick. so it, it's kind of like, you know, again, like, bringing you into this world.
our designer actually worked in c- close collaboration with the estate for Jimi Hendrix and, came up with a lot of the design ideas. And that's another thing, you know, we love to kind of get into the creative process with the artists. Um, sometimes we'll just have the artwork that was used for the CD or the vinyl record, and then we just adapt that to our format.
But, um, like with Duran Duran, they had a concept for a coffin box, and wanted to create a whole album of Halloween songs and, you know, it was called the "Danse Macabre," deluxe album. And we worked really closely with their designer, you know, created the box shape and everything and, you know, came up with something completely custom for them.
So I think that's where it's, it, you know, it gets exciting when it's, you know, a big idea. I also just was at Big Sound in Australia, and we were able to partner with, Central Station Records. Central Station Records just celebrated their 50-year anniversary. They're a dance label, which is crazy if you think about, like, dance seems, like, so new, but, like, this is from disco to now.
And, you know, they were celebrating 50 years and wanted to, you know, experiment with the "KiTalbum, and so we created a "KiTalbum with 51 tracks on it, with 12 videos and, you know, really cool, like, little things that came inside, you know, photos from different eras. And I just liked the idea that we're able to kind of, you know, play with all the media formats, like the music, the art, the photos, the, you know, all of these different things, all the written things.
We had lyrics from Jimi Hendrix, the handwritten lyrics, that had never been seen before. They're from his archives. I mean, those are the types of things I think that get really exciting for any, any release, but, you know, especially with us having this kind of audio-visual, basis for the "Kit" album that, that just takes it to another level.
[00:17:52] Dmitri: Are there other fan experiences that have kind of been created inside KiTalbums yet, or is that still coming down the road?
[00:17:58] Jennifer: Yeah. So we, we released an album with BINI. they're a very popular Filipino girl group. they played at Coachella this year, and their fan community within the, Kit player is incredible.
they're talking to each other. They're showing pictures of the album to each other. you know, they've kind of created this little bond, within the Kit player itself.
[00:18:18] Dmitri: Wow.
[00:18:19] Jennifer: And then they've also turned that into... We worked with, um, Hello82, which is a really great, retailer for a lot of K-pop, and, BINI made an appearance here in LA at their store, um, as part of their US tour.
And, uh, they had the Kit albums as the, you know, that was kind of the thing to get at these events and the in real life events where they could have signings. You know, it's a perfect size to get something autographed. so we, we love seeing those sorts of things come to life, especially when there's a fandom that's really hungry for something, and they feel like it's their own.
You know, we've even had, like, Public Enemy fans are, just loving the Kit album because Chuck D r- is really p- passionate about it. And again, just very different polar opposite types of, you know, fandoms, uh, but, you know, and different generational fandoms. But, you know, it really takes the artist, I think, getting behind it and doing something meaningful with it where it feels like this is just for them.
This is just for the fans.
[00:19:12] Dmitri: Are you saying that, like, for the Benny Kit album, for example, they're unlocking the album inside the app basically, and then once they get in there, it's almost like a Benny social media interaction that's inside the album?
[00:19:24] Jennifer: It's a little bit different than that. We do have a chat feature, so we have kind of this, you know, chat.
it's more like almost like a message board. So we never-
[00:19:31] Dmitri: Mm
[00:19:31] Jennifer: ... say that it's a social media platform. We don't wanna be that. We're not trying to be that. but we definitely want fans to feel like they can communicate with each other. it's anonymous. We don't require usernames, logins, anything like that.
So it's, it's all just kind of fans expressing themselves. but yeah, it's, it's definitely a part of the product is giving fans some kind of living album experience, so they feel like they're-
[00:19:55] Dmitri: So cool
[00:19:56] Jennifer: ... inside of something that's, real and, and happening in the moment.
[00:19:59] Dmitri: It's like fans as digital pen pals or something like that.
[00:20:02] Jennifer: Yeah.
[00:20:02] Dmitri: It's pretty
[00:20:02] Jennifer: cool. Yeah. And we, we are finding that too. We've had a lot of, like, limited edition Kit albums. we did a partnership with Riot Games and, Virgin Records for the "Arcane" soundtrack, "Arcane" Season 2 soundtrack, which is a fabulous soundtrack. they only released 500 of them, and it was like "The Hunger Games."
I mean, it was insane. I mean, within, like, an hour they were all gone, and then they were on eBay and, you know, fans were like, you know, kind of like, "Give me one!" You know, like fighting for them. So, it's exciting when it gets to be like that, where the fans are just, you know, they're really anxious and, eager to have them.
And once they have them, they're like these prized possessions, and I think that's where I get excited because I feel like Something happened along the way with music where we lost sight of the value proposition that this is for fans, that this is something that they'll treasure and keep forever.
And, like, to your point, we, we think of things as being like, "Oh, you can burn it on my computer, and then I just throw away the disc," and that's, that's it. And that's... I don't think that that's, you know, obviously that's happened in historically has happened. but I think if we can give the fans something more and they feel like there's something of value to keep, that starts to change that perception, so.
[00:21:13] Dmitri: Yeah. Makes sense. and you know, on our first episode in the Rising Tide series, I interviewed Jimmy Stone from Alderbrook about why is the music industry so small, and what he talked about was the history of removing scarcity-
[00:21:27] Jennifer: Mm-hmm
[00:21:27] Dmitri: ... from music, where you have this 10 to $12 a month, all you can listen to buffet of streaming services.
It takes away the scarcity, and so then it's like, well, what do you sell next if you have everything? This physical product, the limited editions, the interactivity, the special editions, the things that you c- you know, can't get from a regular f- or certainly from a streaming service, but the additional context and photos and video and all that kind of stuff creates a sense of like, "Oh, this is an exclusive experience."
Which leads me to my big question: How much money could be unlocked for the music market with new physical products? Do you have a sense of that?
[00:22:04] Jennifer: Yeah. If we think about the size of the, what they call the super fan market, it's like 20% of the music industry is the super fans. Obviously it would not be responsible for me to take every super fan is going to get a Kit album.
So, and again, maybe even speaking from the smart media perspective,
I think if we think about it from the perspective of a million fans, if a million fans chose to make an additional $20 purchase a year, that's $20 million in additional consumer spending. And if 10 million fans did that, it would be 200 million. So that's not for Kit Better specifically, it's an illustration, but the word additional really matters.
So-
[00:22:48] Dmitri: Mm-hmm
[00:22:48] Jennifer: ... when I say additional, it's not someone simply buying one format instead of another format that they were going to purchase. We're kind of building on top of that. So it's all new industry revenue. And the opportunity is really to give fans that want a deeper connection with an artist something that they genuinely value enough to purchase.
And if we do that well, I think we can grow the value of music without asking people to abandon their streaming, their vinyl CDs, or anything else that they love. Because growing the value of music starts with giving fans something that they value
[00:23:22] Dmitri: Right. With streaming, if we were to switch to a new format as we did from, say, vinyl to CDs, ultimately, the amount of CDs being sold kind of hit a ceiling.
But with streaming, it feels like it's the floor, it's not the ceiling. So adding on these physical, scarce, limited edition, specially made physical products gets added on top of that. So that, that makes total sense. So regardless of whether it's, ends up being 20 million or 200 million or $2 billion, it's added revenue for the music industry as a whole.
[00:23:53] Jennifer: It is.
[00:23:53] Dmitri: And it's a cool way to connect fans with artists. It's really intriguing, this kind of physical-digital hybrid that you've described. Hey, before I let you go, Jennifer, I have one more question, because you've been in the business, both in marketing and in music for so long, and on the innovation side of it.
When you look at this Rising Tide series we've been doing about growing the value of music, what other technology or trends make you hopeful?
[00:24:15] Jennifer: You know, I think m- my test for any technology is what makes it, good for the artist. so, you know, I think it's, always very practical. It's what's giving the fan something that they value.
so I, I think technologies that I'm excited about are technologies that increase the value of the artist-fan relationship. So I, I think, you know, when we look at technologies that are being developed for the sake of technology, that's less exciting to me. or just being developed because of a trend or something like that.
so, you know, it's, it's interesting to see, you know, direct-to-fan relationships. I love seeing more direct-to-fan, companies emerging. I think that's been a, a big trend over the past couple of years now, because we're seeing more and more of, you know, artists and their, teams understanding what their fans want and being able to develop that for them.
visual storytelling, you know, those types of things. So obviously, I'm very excited about our category and, you know, this idea of, smart albums. so hopefully we're gonna be part of that, that rising tide that you speak of so well.
[00:25:18] Dmitri: You are definitely gonna be part of the rising tide 'cause you're coming to Music Tectonics.
The conference is coming up October 27th to 29th. You and I are putting together a panel called Physical Connected: Bringing Digital Innovation into the Physical Music Experience. So podcast listeners, if you wanna hear more from Jennifer, from KiTbetter, about the Kit album and just the physical music experience and this digital-physical hybrid, Jennifer's gonna be there with us, and I'm really excited to have you there as well, Jennifer.
It's gonna be a blast. You're, uh, you've been at Music Tectonics a bunch, and it's, it's just, you're part of this innovation community that makes it so fun to get business done at the beach. I'm excited to have you there.
[00:25:56] Jennifer: Thank you. I'm excited as well.
[00:25:58] Dmitri: And thanks for coming on the podcast and helping us flesh out this idea of the role of new products in growing the rising tide.
I appreciate it, and I'm looking forward to seeing you soon.
[00:26:08] Jennifer: Likewise.
Jaime Marconette
[00:00:00] Dmitri: Jamie Marconette is a seasoned music industry marketing professional with extensive experience spanning major labels, indie agencies, and music education administration. Based in Nashville, Marconette currently serves as VP, Music Insights and Industry Relations at Luminate, the entertainment company formerly known as Nielsen Music and MRC Data, which powers the iconic Billboard charts.
Hey, Jamie, great to have you here.
[00:00:29] Jaime: Dmitri, thank you so much for having me. Uh, I really appreciate the opportunity to come in and share what we're seeing on the data and, it's great to see you again.
[00:00:36] Dmitri: Yeah, likewise. I mean, this is great for episodes like this where we're covering something like how a certain segment is doing, growing revenue for the industry.
It's great to have somebody who actually knows what's going on with the data, and I always enjoy talking to you, Jamie. Let me ask you this. How big is the market for physical recordings as we round out this year, 2026, and where do you expect it to go in 2027?
[00:00:58] Jaime: Yeah. Well, thank you for that. thank you for the question.
And how big is the market? So in volume terms, 38.2 million units physical, uh, that's made up of vinyl, CDs, and cassettes were sold through the first half of this year. In terms of how the market is doing, that's up just about 8% over the first half of last year as well. So it is growing. A couple of interesting things that we're seeing inside of those numbers though really relate to CDs and vinyl.
So 7.8%, what does that mean? That's about 2.8 million more units in total first half of this year versus the first half of last year 2.2, 2.3 million of those were CDs actually. CDs are up 16% and they're growing quickly. vinyl's still growing, but compared to last year through the first half of 2026, up 500,000.
So you can really see that CDs kind of took off this year. how much does that make up of the whole market? About 5%, but it is a really, fandom-driven, niche audience, loyal audience, audience that will show up for their favorite artist, group that makes up that 5%. So physical, physical's doing pretty well.
[00:02:13] Dmitri: That is so wild. You know, I've got a 17-year-old kid myself, and they've been known to, go to CD stores now. you know, starting with used ones 'cause they're still in high school, and there's still a lot out there in the market. But, it's a thing. It's a real thing. I'm starting to see CDs stack up in their room.
I haven't seen them put one on yet.
[00:02:32] Jaime: Yeah. Yeah, that, that makes sense. Um, we've actually-- We've got some stats, through our consumer research and our con- uh, our audience insights. Uh, we run, run a lot of surveys. We're in the U.S. quarterly with those, and one of our questions is: Have you bought a CD in the last year?
And for those people who answer yes, we then follow up with a question that says: Do you own a CD player? And so for all of the Gen Z and the millennials who have told us that, yes, they have bought a CD in the last year, only about half tell us they have a CD player, which really points to the fandom, the collectible, the supporting your artist to, you know, displaying the CD on the shelf in either your dorm room or your room.
[00:03:17] Dmitri: Yeah, that makes sense. Well, let's talk about that, though. Why do you think physical product has returned when so much music listening is still happening on social media videos, streaming services, even like Bluetooth smart devices, all that kind of stuff? It's like it's all streaming really. why is this growth in physical happening?
[00:03:32] Jaime: Well, I think there are actually few different layers to that question. Number one is fandom that we just talked about, right? And, the ability to support your favorite artist. the ability to, go to an artist's, you know, merch store or even pass through a store like, Target and Walmart and really you see something and it's like, "Wow, I want to be able to display that," or, "I want to support them directly."
So that is n- big. Um, we're also seeing that, K-pop, has, you know, really, really done a fantastic job at recognizing the CD unit as something to rally fans around and engage them around.
[00:04:08] Dmitri: Hmm.
[00:04:08] Jaime: But, you know, I called out that CDs were up 16%. If you take out BTS, if you take out any sort of, K-pop, aligned artists, you still have growth of 6.7%.
So yes, a lot of it's driven by K-pop, but we're seeing artists like Harry Styles, Olivia Rodrigo, and others that are also really connecting with fans around the CD. and then also, you know, we also find that CDs are, they are a lower barrier of entry right now with price.
[00:04:38] Dmitri: Hmm.
[00:04:39] Jaime: It's getting really expensive out there and, you know, we all see the inflation numbers.
Everything is getting more expensive. So, it is a lower barrier of entry to buy a CD than it is to buy a vinyl. And we also see that that is a, a motivating factor as well. You know, there's definitely the tried and true CD, buyers that have, you know, continued to buy CDs through the years, but we're now seeing sort of the, the scope, the genre scope, the artist scope, of the CD buyers has definitely started to grow more recently.
[00:05:11] Dmitri: It's so funny to me that when you said the thing about K-pop, even if you take away K-pop, I'm like, "Wait a second. More than half of this is K-pop?" I didn't even realize that when you gave us the numbers originally, so it's super interesting to me just to know that too, that, you know, things that are trending in a particular genre or from a region of the world is actually starting to translate, you know, in the US and in probably in other genres as well.
[00:05:35] Jaime: Oh, I, I totally agree with you there. And, you know, when we think about monetization of physical music, right, the fandom around it, obviously, hey, you know, you, you could probably, in this video you see I have a bunch of record, covers on the wall, right? We have a record player. We're, we're, we're audiophiles here in, in the house.
So, you know, vinyl has continued to grow, I think, through a mix of audiophiles and then also the fandom and the collectible aspect around it, right? CDs have, you know, a mix of both of those. Um, I mean, obviously there's things that sound just fantastic on CD. but I would say that overall, if you look at the last several years and you look at the top 10 CDs each year, you're gonna see a lot of K-pop.
K-pop has done a fantastic job, uh, as I said, about rallying fans around the CD unit, and they've really driven that. Now they, release a lot of variants. They've got collectibles. They, are able to give consumers what they want as a, at a low dollar price, um, in terms of that, item. and I also think that it was really sort of K-pop that kind of For the most part, pioneered this.
And you start to see a lot of Western artists, who add more variants, and are able to see how, K-pop is able to monetize this format. And so now they've added more variants and y- they've added more, collectible things in nature, I don't know, posters and those sorts of things as well.
And so I think that a lot of the trends that we're seeing today through pop and through other genres around how you can offer the fan physical items through the CD, I think that started with K-pop. And so they-
[00:07:15] Dmitri: Mm
[00:07:16] Jaime: ... really pioneered that. They've really done a great job of understanding fans, understanding what they want, and yes, you do see that now spread to, US pop artists in, in, for lack of a better word, you know, Western pop artists as well.
[00:07:27] Dmitri: Yeah. Yeah. You know, it's interesting. Going off of that, what are you seeing in the emergence of new form factor physical products? We talked about vinyl and CD, but there's these new offers too. Is, this a fad or is it here to stay?
[00:07:39] Jaime: I think it's here to stay. Um, I think that there are a lot of conditions out there that make it so these sorts of items are here to stay, right?
And we're really excited. we're actually gonna start reporting on a brand-new format, physical format within Luminate called Smart Media. and this actually kicks off, uh, just in a couple of weeks here, uh, with us being able to start to report this. And now Smart Media, what is that? It is a physical product with a digital experience.
it is a physical item that uses technologies like a QR code or, perhaps, a-- it's called an NFC chip. It's near field communication. Essentially, it gets... It's almost like Bluetooth, but it gets to it a certain, you know, physical item, and it'll, it'll unlock experiences and things. So we're seeing the connection between the physical world, which is that physical product, unlocking digital music and digital experiences, and it's called Smart Media.
And there is a lot that you can do with that when you start to think about how you can customize that for a release or, even the shape, uh, that these things can kinda take or, you know, the additional items that can be packaged with it. So fandom in music and collectibles is definitely on the forefront here, and I think there's a lot of room to grow.
And with us also now being able to report on it, with some of these... Uh, Billboard has a set of rules around them, but there is chart eligibility for here. Uh, so now with Billboard also, you know, making, uh, some of this chart eligible within their rules, those sorts of things are probably gonna open up the market even more.
Uh, so you could expect to see this. But I think that, you know, when we look at K-pop driving this, pop artists taking some of these learnings and Engaging fans around it, and now new forms of technology to be able to do this with, I think that you'll see it grow.
[00:09:32] Dmitri: Interesting. that's a very useful tidbit for this rising tide theme that we've been talking about on this miniseries of the podcast, and what we'll bring to the Music Tectonics Conference this year, which is actually only a few weeks away from the publishing of this episode.
And you're gonna be there doing a fireside chat about the growth of transmedia. What do you mean by that, and can you give us a taste of why it's important to discuss it as we look at growing the value of the music industry?
[00:09:55] Jaime: Yes. So I am incredibly excited to be there, and I'm incredibly excited about this topic.
Uh, if you look at all of entertainment today, whether it's music, whether it's film and TV, whether it's gaming, whether it's all of these, forms of entertainment, you know, there's a couple of really interesting factors. Uh, we live in a mind share world now, where typically if you're doing one thing, you're not doing the other, right?
There's only so many hours in a day. So when we talk about transmedia, we talk about how can you start with one particular piece of IP, and in this case music IP, and start to identify and leverage all of these other media platforms to drive the full vision of an artist forward. I'll give an example, right?
You start with music It becomes a sync, then you're able to, you know, have it also synced in a video game. How do these things then work to grow an artist internationally into other territories, right? Again, it comes back to one piece of IP, but across multiple different, media surfaces to expand the vision of the artist.
[00:11:09] Dmitri: Yeah.
[00:11:09] Jaime: And I'm incredibly excited to talk about this more because, I think in, again, in our mindshare, world, being able to jump from media platform to media platform, really helps drive, you know, the overall vision of the artist forward.
[00:11:25] Dmitri: I like it too because what it feels like is the push to streaming.
It's almost like now you're talking about another kinda push/pull. Physical media in a way is a, form of fandoms pulling back a connection with artists. This transmedia is a similar thing in the sense because in all the push/pull and the move to streaming, music has become frequently in the background, and transmedia almost inherently pushes it to the foreground because now you're inside games, you're inside film and TV, you're inside social media, et cetera.
It's still the soundtrack of, but it's putting it across multiple verticals, which gives people more exposure to it.
[00:11:59] Jaime: Exactly, right? Music is the through line, right?
[00:12:02] Dmitri: Mm.
[00:12:02] Jaime: In all those things we just talked about, music is the through line.
[00:12:04] Dmitri: It is.
[00:12:05] Jaime: And so when you're talking about media, music is the through line, and how can you reach new audiences and engage them through these platforms and these different types of, media entertainment?
[00:12:17] Dmitri: If you've ever seen those remix videos of like Mick Jagger where they replace the audio -- and it's just him with footsteps and him go you realize of any video, I mean, obviously it's a music video-
[00:12:30] Jaime: Yeah
[00:12:30] Dmitri: ... but of any video when you take the music away, any visual at all, you not only lose the language and the message, but you lose the entire emotional timbre.
I feel like that's the contribution mu-music makes. It gives you the emotion that goes with everything that you're seeing on the screen. So, I love the transmedia approach. I can't wait to hear what you have to say at Tectonics. It's gonna be fun.
[00:12:51] Jaime: Oh, yeah. I, I can't wait to be there. Um, I can't wait to be there.
It's gonna be great. And, and yeah, and I love what you just said too. It i- it's the emotional timbre for sure. It is.
[00:13:01] Dmitri: Yeah. Jamie, so great to have you on the podcast. Looking forward to seeing you in just a few weeks. appreciate your data and your ideas here. Thanks so much.
[00:13:08] Jaime: Thank you.
Tarun Nayar
[00:00:00] Dmitri: Tarun Nayar, a biologist turned musician who performs as Modern Biology, makes ambient plant music by improvising with modular synths and the natural vibrations of a place, from plant bioelectricity to the Earth's own hum. His videos, they've been viewed over 200 million times.
He has over 1.5 million followers on social media, and he's performed everywhere from Art Basel Miami to the Nobel Prize Museum in Stockholm. You literally have probably seen him. I don't know how you haven't. He launched the Pocket Scion, a portable biofeedback device, and puts most of his proceeds towards protecting wild places.
.. And Modern Biology, that's his artist name. He's checking in with us before he launches on his annual Mushroom Church tour, which ends just in time for him to come to "Music Tectonics." You're gonna meet him. Welcome back to the show, Tarun.
[00:00:49] Tarun: Hey, Dmitri. Awesome to be here.
[00:00:51] Dmitri: And this, what did I call it? A biofeedback machine. It's a synthesizer, right?
[00:00:55] Tarun: Yeah. It's a synthesizer that takes information from living organisms and turns it into sound.
[00:01:02] Dmitri: It's so cool. You gotta see the videos, guys, if you haven't. and we'll get into it a little bit, but how did you decide to create your own synth, which you now sell at your shows?
[00:01:10] Tarun: Yeah. Well, I think it's important to say that it's a collaboration with Instro synthesizers based in Glasgow. So as a, uh, an artist, actually, I was trying to figure out how to build it myself, 'cause you can build prototypes. But I quickly realized that without a partner who knew how to fabricate and had global distribution, that, you know, I might sell five or six of them, and then how much time do we really have as artists to be, like, hand-building synthesizers?
So it's-
[00:01:35] Dmitri: Soldering
[00:01:36] Tarun: ... very much a collaboration between myself and Instro. And-
[00:01:40] Dmitri: Yeah
[00:01:40] Tarun: ... the idea came because I was no- you know, I was posting these videos. A bunch of them were going viral, and every comment was, "How do I do this?" And I was using modular synthesizers, and I just didn't feel good about telling a bunch of people who don't even know anything about synthesizers to go get, you know, thousands of dollars of modular synth gear.
I was like, "We need to figure out a portable, affordable way for anyone to do this," but also kind of ground it in science and not, you know, kind of esoteric wellness stuff, because there is some science at the heart of this which I find fascinating.
[00:02:12] Dmitri: Wow, maybe some scientific wellness stuff instead of some esoteric wellness stuff.
You know, that's such a cool story. I can't wait to get into it with you more now. I think we'll have you talk about it at the conference too, and people could actually put their hands on this thing at the Creator Fair at the Carousel. What's the fan response been like to releasing and selling the Pocket Scion, this, new device that you partnered on?
[00:02:32] Tarun: I mean, it's insane. I was saying to some friends, shortly afterwards that I think it's one of the most meaningful things that I've ever done as an artist, is to put out-
[00:02:41] Dmitri: Aw
[00:02:41] Tarun: ... an instrument. And I, I wasn't expecting that. I was responding to, you know, a demand that I perceived from comments and DMs and stuff.
But to actually put it out And, you know, maybe s- slightly egotistically to see my name on an instrument, and now that there's thousands of them out there in the wild, to see people every day posting their own experiments and finding new uses, and somebody recently just, like, basically reverse engineered the firmware and posted an open source version of the firmware on GitHub, so anyone can just basically hack their PocketSci and, and come up with their own ideas about how we should be interpreting biological data.
I mean, it's so cool. Like, I'm over the moon, and I'm stoked every day, and it's turned into a big part of my life.
[00:03:31] Dmitri: It's so cool. You're like this poster child for what Music Tectonics is about, because we started thinking about the whole music tech side in terms of distribution and streaming and licensing, and then we started seeing that, like, a lot of music creator types of companies and, projects were showing up, the BandLabs and the Landrs of the world, and then we had, like, the, Blipblox and the Demon Box and the Musical Beings Tembo, these new inventions, musical inventions.
And here you are, you're an artist, you're a creator, you're on social media like crazy, n- and not in, like, a cringey way. Like, you're just you. You're your artist self putting it out there. The same way you make music is the same way you make videos, and you're bringing community along. It's so wild to me, and it's weird to me to be like, "Oh, we're doing this episode about physical product and merch and vinyl."
Let's talk about selling synths. Let's talk about an artist who's an inventor and a founder, and he's selling synths at his shows. But I'm very curious, how do synth sales fit into the overall business model of Modern Biology, and do you expect it to grow and be substantial over time? Is this a thing?
[00:04:38] Tarun: I mean, it's a thing.
It's-- makes way more sense than going on tour, I'll tell you that much.
[00:04:43] Dmitri: Damn.
[00:04:45] Tarun: Yeah. I would say at the moment, it's probably about half of my revenue comes from-
[00:04:54] Dmitri: Whoa
[00:04:55] Tarun: ... synth sales, and, um, I think we're just scratching the surface. And, you know, both the folks at Instruunt and myself are very excited about this.
And, I would say, yeah, it's, it's serious. You know? Like, we take it very seriously, and we spend a lot of our energy and time thinking about this, and thinking about what's next, and we have some, you know, very special surprises that are coming out in the next week or so, actually.
[00:05:21] Dmitri: Oh,
whoa.
[00:05:21] Tarun: Yeah. Yeah.
Yeah. Totally. So we're, you know, it's a very active project. It's exciting and, yeah, the financials make sense and, you know, maybe just quickly on that note, I would say, like, the interesting thing about selling something like a synthesizer is you're working with Just a very different-- Like I, you know, 'cause, our synthesizer costs 189 US dollars.
So you wouldn't think that there'd be too many people at a show who are gonna dish out 189 bucks, right? Because, you know, sometimes I struggle to sell a T-shirt for 30 bucks. And I was playing a tiny show last week in Brattleboro in Vermont, okay? Tiny town. there was maybe 70 or 80 people at the show.
We sold 10 70 people at the show and we sold 10. It's insane. Like-
[00:06:05] Dmitri: Yeah
[00:06:05] Tarun: ... we'll, you know, we'll go play like in New York or something and sell 20 or 30 of them at the show, and you just don't expect it. But I think that's the thing. I think it's like maybe people are not as willing to buy, you know...
E- everyone's got a T-shirt already. Everyone's got, you know, like a CD or there's, you know, there's vinyl out there. But when there's something that's really unique that's associated with your sort of artistic persona in a way that is not associated with anyone else's, like people come to the show and they're like, "Oh, this, I can actually take the heart of this show home with me as an instrument that will sort of help me in a, in a much different way than just listening."
It's, it's much more interactive because it's like an instrument. It's like I can make my own music with this, and I'm part of this broader global community.
[00:06:50] Dmitri: Your career feels like mushrooms to me. They feel like mushrooms that are spreading, that are under the earth, that are connecting things.
I mean, because like those people are gonna buy those synths, and a bunch of them are gonna post videos on social media too.
[00:07:02] Tarun: Yeah.
Oh, yeah.
[00:07:03] Dmitri: So then they're gonna become part of your street team, your mushroom street team-
[00:07:07] Tarun: Well, yeah ... of- I, I, I guess so, yeah. Maybe the underground network or something, you know?
[00:07:11] Dmitri: Yeah. Well, I mean, they're gonna post about it and other people are gonna say, "What's that? How are you doing that?" "Oh, there's this guy, Modern Biology. He invented it."
[00:07:18] Tarun: Right.
[00:07:18] Dmitri: "You should see his mushroom church." You know? Like, it's like-
[00:07:21] Tarun: Yeah, yeah.
[00:07:22] Dmitri: It just goes on and on.
[00:07:23] Tarun: Yeah.
[00:07:24] Dmitri: And, and, you know, to, to bring it back to the topic, we're talking about growing new physical products as a revenue source for artists and for the music industry overall.
That's part of our big rising tide theme. Do you think other artists should consider selling music that's making gear rather than just releasing recordings?
[00:07:40] Tarun: A, a million percent. Yeah. Like I've-- If I was at a show, you know, by maybe an artist that I didn't, I wasn't super passionate about but just stumbled into a show, and they had a cool instrument for sale for like less than 200 bucks, and I liked the show, I'd be like, "That's way better."
Like, you know, I'm like, I've got GAS, you know, gear acquisition syndrome. I love it, and it's so mu- I'm so much more liable to buy an instrument. And maybe I'm biased, you know, because I'm a musician, but I have noticed that, yeah, again, I think it comes back to like if this is something that is, you know, unique to an artist, even if the cost is way higher, I think it, makes more sense almost to sell an instrument or a way of being creative.
just like we're moving towards this experience economy I think that the experience economy also plays out in the gear that we sell. It's like, is it gear that enables us to have an experience?
[00:08:38] Dmitri: Yeah.
[00:08:39] Tarun: Or is it just a passive kind of, "I'm gonna listen to a piece of vinyl." Don't, don't get me wrong, I l- I love vinyl and I love T-shirts and stuff too, but this is a way more, you know, conceptually it's way more interesting, but it also is, like, makes way more sense on the revenue side of things.
[00:08:54] Dmitri: It's so wild to me. We're in this moment of time where this battle is playing out with generative AI, where there's these companies that have scraped the music, the intellectual property of all these creative musicians, many of whom are not making a living at music.
[00:09:08] Tarun: Yeah.
[00:09:08] Dmitri: And it's supposed to be this interactive thing, and it's supposed to unlock creativity.
And I think those things are true, but this is, like, a whole different way of doing the same thing, right? Like, putting the tools of music creation into the hands of your consumers, of your fans, of your community, i- a way that doesn't undermine anybody else's intellectual property or copyright or creativity.
[00:09:36] Tarun: Yeah. Yeah, I mean, I don't think that AI has-- Um, I'm gonna, you know, just go out on a, and say it. I don't think AI has any role in the creative process as a musician. I have no interest at all in using, like, Suno or any of these platforms to m- make stuff. I'm just not. That's-- My joy is in the creative process.
But, I think, you know, it's almost like putting out a device like this or, you know, like anything really, that doesn't require people to be on their phone or on an app or on a screen. We deliberately made it sort of plug and play, and it's all, you know, just analog circuits. it kind of encourages, like, especially kids, we have a lot of kids who use them, encourages them to, like, get off their freaking phones and get out into nature and be listening to stuff and having ideas and,
What do they call that tendency with AI now? Like, cognitive you know, something, cognitive decline or something. It's, like, been studied that our brains, you know, as we sort of interface with these models, which can be really-- I mean, doing your accounting, your taxes, I think it's great. But making music, why would I wanna outsource that to a fricking AI?
That's ridiculous. I mean, that's, why I'm a musician, 'cause I like to make music, yeah.
[00:10:47] Dmitri: This has been so fun, Tarun. I guess any other thoughts on our theme of growing the music market, supporting artists and creators like you? Any kind of new products or ways that you're thinking about this rising tide theme?
[00:11:00] Tarun: Yeah. I th- I think, uh, I would just encourage artists out there to think laterally. You know, the music industry as it's currently structured, I just don't believe it works anymore. But I think there's lots of people who like music, and there's lots of super talented artists, and there's lots of people who will pay to attend music events or buy things.
I just think we have to think totally different than the way it's been, and that's why I think that, you know, creating these communities like you've done, Dmitri, is so important 'cause it gets us together and we can come up with new ideas.
[00:11:29] Dmitri: Amazing. This is a blast. You're listening to "Modern Biology" on Music Tectonics.
Go back to our February episode. Tarun and I ran into each other after probably a decade, at NAMM, and I've got a great interview with him there under the trees talking about plants and music and so forth. And Tarun, you're gonna be at Music Tectonics, so people can try their hand at the Pocket Scion and see you in action.
S- looking so much forward to it. Thanks for joining us.
[00:11:54] Tarun: Okay. Thanks, Dmitri. Take care.
Let us know what you think! Find us on LinkedIn, and Instagram, or connect with podcast host Dmitri Vietze on LinkedIn.
The Music Tectonics podcast goes beneath the surface of the music industry to explore how technology is changing the way business gets done. Weekly episodes include interviews with music tech movers & shakers, deep dives into seismic shifts, and more.
