Business Spotlight: Mixtape, Vol. IV

The audio cassette tape is not dead.

National Audio Co. Inc. sells 25 million of them each year, and owner Steve Stepp says a deal in the works with The Walt Disney Co. could bring another 600,000 cassettes to market.

“Oh, they’re going to die – someday,” he says. “Conventional wisdom was that they were going to die in the 1980s. And they didn’t – or the ’90s. They’re not about to now.”

Banking on what he calls the retro revolution and a naturally higher sound quality in analog recordings, Stepp says he’s spotting a comeback. National Audio Co. is its busiest in 20 years, finishing 2014 with $5 million in cassette tape sales, Stepp says.

Already ramped up by independent bands and record labels, he says talks with Disney that began last summer could fast forward audio cassettes into the mainstream again.

“The cassette is winning back the music market from the CD. It’s a nostalgia market for people who weren’t there the first time to hear it,” Stepp says.

Awesome mix
While “Guardians of the Galaxy” was saving the summer box office, Stepp says a Disney buyer called NAC seeking production of a cassette tape to replicate the Awesome Mix Vol. 1 central to the Marvel film’s storyline. Disney marketers were developing a plan to release the movie soundtrack on a mixtape just like the one in the film.

“She said, ‘I never thought I would be making this call. I was here 11 years ago when the audio cassette died at Disney. We need you to manufacture a tape that looks like an antique, like it’s been out there 30 years,’” Stepp recalls of that first conversation.

Disney had designed a mock with an old-looking cassette, smoky colored and a handwritten label on the J-card insert.

“We knew we could do it,” he says, pointing to NAC’s in-house graphic artists.

A challenge was matching the plastic cartridge color; most are black, white or clear.

NAC and Disney bounced files back and forth to create the label, and Disney next shared audio files of the originally licensed recordings.

NAC audio engineers got to work and sent Disney a sample.

“Their response was, ‘Wow, little tape, big sound,’” Stepp says.

The first order was a limited release of 5,000 commemorative copies for sale on Black Friday. After those sold out, Disney ordered 5,000 more, which were presold before delivery. NAC ended up producing 20,000 commemorative sets for Disney stores.

“They’re now going to the mass market outside of their stores,” Stepp says, noting he’s prepared to get a 600,000-tape order for major retail chains.

While it’s a boost in sales, Stepp says a trendsetter such as Disney could swing consumers back to cassettes.

“That’s a big tail that wags the dog,” he says.

Disney’s not the only one.

Last month, NAC signed on as a dealer for Teac cassette players modeled after the brand’s 1970s tape decks. Three models are on display at NAC’s 309 E. Water St. office: a double auto reverse cassette deck, a CD/cassette recorder deck and a turntable with cassette, CD-R/RW recorders and a USB port.

“They’re in current production,” Stepp says, noting in the first few weeks of sales, NAC is moving one or two a day. “We’re not just convinced, Teac is convinced. Big companies like that don’t start production unless they see demand.”

Blast from the past
On the independent record label side, Drag City in Chicago orders a few thousand cassette tapes from Stepp and company each year. Production Manager Scott McGaughey says NAC is in a unique position in the industry.

“Since the renaissance in the tape world,” he says, “NAC is honestly the only cassette manufacturer I know about. They’ve acquired a lot of the old duplication equipment from the major labels that used to pump these things out.”

Stepp says when CDs splashed on the market, he went on an equipment buying spree, for jobs such as magnesium plate etching to polystyrene labeling.

“We had a hunch that wasn’t the end of the tape business,” he says, noting NAC’s annual cassette production dipped to roughly 18 million in the early 2000s.

Next on his purchase list: a tape slitter. “It’s like looking for dinosaur eggs trying to find a tape slitter at this point,” Stepp says. “Everything we touch seems to be that way. That’s what keeps us in the business. We are specialized.”

Among the 400 artists Drag City works with, McGaughey says more musicians are asking about cassettes.

“Cassettes do well at shows on the ‘merch’ table. Maybe because it’s the cheapest format,” he says of the typical $5 retail price.

Drag City pays $1.50-$2 for the manufacturing, duplication and packaging of a cassette, compared to the $5-$10 unit costs of resurging vinyl. McGaughey says CD orders in his shop have declined steeply in the last several years, giving way mostly to LPs, but tapes, too.

“Some people have a fetish for it. It’s such a cool format,” he says. “It’s very alive and it’s this funny little machine with moving parts.”

NAC also works with CDs and digital files, and constant jobs have been production of tapes for courtrooms and spoken word cartridges for the blind. Working with such publishers as Reader’s Digest, Newsweek and the National Library Service for the Blind and Physically Handicapped, books, magazines, Bibles, teaching aids and weight-loss programs have continued to find a place on tape. According to a Library of Congress news release, NAC duplicated over 49 million copies of the 57,000 talking-book titles distributed through its network of libraries.

Two years ago, industry enthusiasts started National Cassette Store Day.

“All these bands started coming to us and asking if we could get their project out by a certain date,” Stepp says. “We blundered into it.”

Next up, he says the crew is working on a rerelease of Metallica’s first album.

“We’re making the label look like it did back then,” says Stepp, who’s 67. “It’s not old fogeys like me who are driving this retro revolution.”[[In-content Ad]]