Small Czech village is at the center of the global vinyl renaissance |  Business |  News of economy and finance from the point of view of Germany |  DV

Small Czech village is at the center of the global vinyl renaissance | Business | News of economy and finance from the point of view of Germany | DV

Lodenice doesn’t look much like the heart of rock ‘n’ roll. But in a small Czech village, peeking out from behind the highway connecting the capital of Prague with Germany, is the world’s largest producer of vinyl records.

The vinyl renaissance in recent years has taken GZ Media to heights that owner and president Zdeněk Pelč could hardly have imagined as he steered the company through the turbulent days of communism, revolution and transition to a capitalist system.

“At times it was like the Wild West,” said Peltz, who joined the state-owned Gramophone Plants as a manager in 1983. He smiled as he remembered running a privatized company during the turbulent 1990s. This decade has seen the birth of the Czech Republic on the ruins of former communist Czechoslovakia, but also the near death of vinyl.

As the advent of the CD almost suffocated the old technology, GZ Media’s vinyl presses almost came to a halt. By 1994 the company was producing only 350,000 records a year, vinyl presses continued to be issued by punk and metal bands looking for cheap production and small runs.

“Now we produce the same amount in one day,” said CEO Michal Štěrba.

GZ Media owner Zdeněk Pelc (left) and CEO Michal Štěrba see the vinyl resurgence as a dream come true.

The vinyl renaissance has led to an expansion that, in addition to the extensive Lodenitz site, sees the company operating six plants in four different countries. Last year, GZ Media released 56.5 million records from the likes of The Rolling Stones, Nat King Cole, Black Sabbath and Ariana Grande. He hopes to have 140 million produced by 2024.

Consequently, the story did not end in the 1990s. But it’s mutual.

So Pelch, 71, who is only in the office four days a week after “stepping back” from day-to-day operations, and CEO Sterba haven’t been dealing with the vinyl boom as well as the fallout from COVID. -19 pandemic, populism and war.

Rise from the dead

“Nothing ever beats the rich, natural sound of a vinyl record!” according to the GZ Media website.

Although the company also produces CDs, DVDs and has a large print production, it is the vinyl division that is grabbing all the attention amid a stunning resurgence as rock and pop fans have developed a fresh taste for auditory, visual and tactile pleasures. LP.

During the decline of vinyl in the 1990s, only 1 million albums were sold in the United States, according to the Recording Industry Association of America, the largest market in the world. While it’s still a drop in the bucket compared to streaming, U.S. vinyl sales in 2020 topped 22 million.

“This is the only example of a product that I know of that almost dies, only to come back,” Pelk says enthusiastically. “There is too much digital information in the world. Some people like to hold beautiful packaging in their hands. For the same reason, books still exist.”

These newly priced objects of desire got an extra boost when COVID-19 forced people to stop spending their hard-earned money on concerts, restaurants and holidays and locked them up at home, according to the president of GZ Media.

But while the pandemic has boosted demand for records, it has also disrupted trade and transportation, Sterba pointed out—issues already compounded by a recurrence of trade barriers raised by populist agendas.

The fallout from Donald Trump’s disputes with Europe or Brexit means that shipping containers still take longer to cross the Atlantic, and costs for GZ Media have tripled. The quarantine is still delaying the arrival of a Chinese technician to install a machine bought from China two years ago.

Both the president and CEO say the company’s ability to adapt to the vagaries of the music world for decades allows them to navigate such challenges with ease. But Pelch blushes visibly when it comes to the continued rise in energy prices.

The company’s vinyl presses – more than 70 operating around the clock in Lodenitz – are voracious gas and electricity consumers as they heat the vinyl up to 160 degrees Celsius (320 degrees Fahrenheit).

With the war in Ukraine causing prices to skyrocket, GZ Media’s electricity costs have risen by 2,000% over the past year. Pelch hinted at suspicions that the country’s powerful energy lobby may have helped push Czech energy prices to the highest levels in the EU.

This raises the question of sustainability. While attempts are being made to make vinyl more sustainable using recycled plastic, Sterba said this is just the beginning.

“Of course, the most sustainable solution is to download music, but consumers want an emotional connection that [music downloads] just doesn’t deliver,” he said.

Photograph of a worker showing raw materials for making vinyl records.

Sustainable production is a big challenge for a company that recycles 100% of its waste.

Music of the future?

GZ Media also claims that its environmental impact is reduced by locating production close to consumers. In June, the company launched its second US plant at the Nashville Music Center. The company also has manufacturing bases in Canada and France.

“The vinyl renaissance is largely limited to the US and Western Europe,” which covers the division’s expansion plans, Sterba said, although the company also prides itself on its high-quality, high-tech printing and packaging services. “The US is the largest vinyl market in the world, so the decision to expand is an easy decision,” Pelk added.

But other areas are more difficult. Asked about European markets in the east, he frowned. GZ Media used to have Russian clients, “but we stopped working in this market because they just disappeared without paying.”

However, “adaptability” is certainly the key word, and Sterba should keep it close at hand while working alongside the company’s longtime president.

“Now it makes sense to increase investment in the US,” Pelk said with a smile, “but maybe in three or four years we will go to Asia. Or to the UK after Brexit.”

At the same time, CEO Sterba, whose job it is to deal with nuts and bolts, grimaces good-naturedly at the grandiose ideas of his colleague.

“We always remain ready to adapt,” the president said, and shrugged. “For example, vinyl is popular now, but who knows what will happen in 10 years?”

Editor: Uwe Hessler


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