Vinyl on demand

Business Age Q&A with Steve Rhodes, CEO and Co-Founder, elasticStage
BizAge Interview Team
A model by a rose bush holding a record

Hi Steve! Tell us about elasticStage

We created the first true on-demand vinyl platform, also offering a more sustainable solution to manufacturing, whilst trying to improve the audio quality.

Despite the enormous increase in popularity of vinyl over the last 15 years, most of today's 50 million or so music creators that upload over 40,000 songs on Spotify every day have been totally excluded. Today's antiquated and dirty way of making vinyl is not suited for small self-releasing creators, but they will soon overtake the major record labels in revenue.

We wanted to change that. Having said that, the big stars and major record labels also benefit from our technology. We enable creators of all sizes to release records with the ease of a web browser almost instantly, at no cost, to a global audience. Our revolutionary platform is backed by leading experts from across the music industry.

It's a brilliant idea. How do you make it work?

It requires the best talent from many fields including software engineering, mechanical engineering, materials (plastics) and sound engineering. The biggest challenges were to understand vinyl technology - one of the technological marvels of the last century - and to this day it is incredibly difficult to master. Most of the information on how to make great sounding vinyl records has been lost or is in the hands of less than 10 people. We had to reverse-engineer a lot of the old tech and then come up with a modern way of getting the same results. Current pressing plants still use the machines from the 20th century to cut master discs. The Neumann engineer that built the best one in the ‘80s told everyone he will take the secrets to his grave, which he did. My co-founder Werner Freistaetter had a vinyl business for over 10 years and was experimenting with one-off vinyl records for a long time, which became the foundation for the elasticStage technology. He is also an excellent sound and electronics engineer. I myself am a mechanical engineer with a deep background in software development, but also music production and engineering. We both were signed to major record labels in our 20s and have a good understanding of the music industry. Most importantly, we were able to put ourselves into the shoes of music creators.

Each record is printed when a consumer wants it

You must get asked this a lot...but why does vinyl still appeal to so many people?

There are two categories of people it appeals to. One is the “creator”, the other is the “consumer”.

For creators, the ultimate goal is to make a record, and if you compare this to a book writer, you only think you’ve succeeded once you have a published paperback with your name on the cover in your hands. A Kindle version won’t do. You want a physical book on your shelf, to proudly show it off to your friends. The same goes for music. The ultimate status symbol for a musician is still to have your own vinyl record with beautiful artwork. To hear your own music coming from a vinyl record is an emotional experience.

At the same time, for fans who have a strong connection to an artist or band, they want to be able to look at and touch a physical product that they own. It’s about ownership and again, an emotional connection to an item they see in their collection. For some consumers it’s about building a collection. Digital music is too easy and I believe anyone can do it. Some things have to be hard to be appreciated. Then there is the beauty of the large physical artwork, taking time out from your mobile phone, holding it in your hands, while listening patiently to the record. It’s a totally different experience. I also think people want a break from their digital screens. Consuming music through physical records is a deeper, more relaxed and super cool experience.

What made you think there was money in on-demand vinyl?

Literally EVERYTHING is better compared to the old system. There are no compromises. We were thinking for years “what is the catch?”, but were blown away by all the positives that our system would offer. We knew that industry (record labels) would love on-demand, getting rid of their expensive warehouses and being able to release their vast back-catalogue (like they do with streaming), but my money was always on the growing number of music creators. I worked with the biggest names in music before, when I owned one of the best mixing studios in Europe 10 years ago. What I’m most excited about is that our technology gives emerging creators, ordinary people making music at home, or teens starting-out, the ability to make vinyl. They are the future. Until now, for the most part, only established record labels that understood the industry could make and sell vinyl records. Bigger artists will appreciate the speed at which we can release music on vinyl with us.

With elasticStage there are all the possibilities of making user-compilations (a playlist on vinyl). Making playlists on vinyl and creating artwork for it is another form of creativity that many will appreciate that are not creating music themselves. They become curators of the ultimate mixtape.

What is the secret to making the business work?

Endurance and not being disheartened by failure. We knew from the beginning that what we wanted to do was almost impossible. But we also knew that if we succeeded, there wouldn’t be many copy-cats, at least not for a few years. Many times we have hit a wall, when we thought it might not be possible after all. Sometimes we were close to a breakthrough, only to be crushed the next day. It is an emotional rollercoaster that is not for everyone. But even if you have the best idea, you must be able to sell it to the investors. That’s another job, apart from all the engineering that you have to master. I would have to say that this is a gift you are probably born with. It’s a bit like song writing. I never met a person who could learn to write great songs. You have it or you don’t.

How do you market the company?

We were lucky, as we knew that people would be dying to get our product. From the beginning the demand was always greater than the supply. We never had to create a market for our product. People from all walks of life that I have met, instantly connected with our idea as well as vinyl records, and understood that there must be a big market for what we wanted to do. So many small artists have zero access to vinyl records and even word of mouth would rip like a wildfire through the creative community if they could make and sell vinyl with no up-front cost to a global audience.

What funding do you have? Is it enough?

It is never enough! But so far it was always what we actually needed to get the next step done. Because part of our business is hardware (I would say it’s 50% software, 50% hardware), things take time and even all the money in the world can’t shorten the time it takes to build many prototypes and learn. At the beginning there is great uncertainty that you will succeed, so funding is very limited. To make things more challenging, when we began six years ago, music was not considered “investable”, especially in VC circles. This is why I had to approach many small investors, some from the music business (as they understood the brilliance of the idea), or ordinary people. VCs don’t tend to invest into something they don’t understand and usually stick to the field they are already in. Building hardware is also very expensive. Even making record sleeves requires machines that cost more than a few family houses. And there is no way to start small and get traction. To make the first vinyl record sleeve, you literally need millions! To build the first prototype to make a vinyl record another couple of million. To scale it up so you can actually make a sizable number of records a month will set you back another couple of 10s of millions. The entry barrier is incredibly high. A lot of VC funds told us they want to see some traction first, and you ask yourself “but how?!” In the end the solution was to painstakingly get many small investors on board, and through hard work convince every single one of the over 80 investors we have so far to get to a stage where we finally can have some traction and open up the door for institutional investors.

Tell us about the business model

The secret is to have a monopoly. Obviously it’s incredibly hard to find things like this in our world. Almost everything has been done already. Even if you had a new idea, how long would you be able to defend it? We knew from the very beginning that if we succeeded, we would be the only one for years to offer on-demand vinyl, because it is incredibly hard to do what we do. So the next question was, can we sell vinyl at a competitive price? We knew we didn’t have to be the cheapest as vinyl is a luxury item. There were other factors that mattered such as availability, accessibility, size of catalogue that you can put out on physical, low minimum orders, no-upfront investment and eliminating the financial risk for rightholders. In the end we were able to achieve a low price point by consolidating several businesses that were necessary to make and distribute a record into one and replacing a very manual and complex manufacturing process with a fully automated simple alternative, and at the same time eliminating a costly and time consuming warehouse system. In order to do this we had to start with a clean slate. We had to tear down the whole building.

There are a rapidly growing number of music creators (50m estimated in 2025), with more than 40,000 songs being uploaded on Spotify every single day. Yet, physical records (vinyl and CD) are still made with the technology from the last century that was built for a few thousand artists selling millions of records. elasticStage, on the other hand, enables creators of all sizes (not just megastars) to release records with the ease of a web browser, at no cost and to sell them to a global audience. Our revolutionary platform is backed by leading experts from across the music industry.

What were you doing before?

Both my co-founder Werner and myself come from the music industry and were once signed to CBS/Sony, after which we went on to own one of the best recording studios in the world. We were true audio geeks, but also early adopters of digital. I had a very deep background in computing from an early age (while studying mechanical engineering) and always loved to combine my love for music with technology. I had a ProTools system in 1992 and already mixed in the box when everyone else was still using tape machines and mixing desks. Finally when everyone else jumped on the digital bandwagon around 2000, I went back to analog mixing desks and tape machines, recognising that something was lacking in the digital domain. For years I tried to understand what analog tape machines and mixing desks add to the sound that we consider pleasurable to our ears. I also studied acoustic design and learned how to build great sounding studios (rooms) over many years. This helped a lot in designing our vinyl technology. Werner and I were “jacks-of-all-trades” from the beginning. In different ways and different fields, which is why we complement each other. For example, I understand computers and he understands electronics. I always wanted to be the front man on the stage, he hated it. We both dabbled in many things, sometimes with no immediate financial gain. But when I had the idea for on-demand records, all our skills seemed to finally dovetail and pay off.

What is the future vision?

Whenever I set out to do something, I want to be the best. I don’t aim to be second best. We want to offer the best experience to vinyl lovers out there. This means creators and consumers. We want the best online store and the best sounding product. We want to do things that were considered impossible. We want everyone to be able to release their music on physical records and sell them to a global audience. The marketing power of 50 million creators is unbelievable. They can easily sell one billion vinyl records a year. We want to enable vinyl lovers to get every song that exists on vinyl. We want to get to a place where every song that is available on Spotify today, can also be made available on vinyl. People are tired of new formats. They want certainty. They want to know that they can still play the music that they buy today in 30 years’ time.

Written by
BizAge Interview Team
September 2, 2022
Written by
September 2, 2022