In January, three months before Reservoir Media put rap group De La Soul’s first six albums on streaming services for the first time, the company began taking pre-orders for reissues of classic albums like 3 Feet High and Rising and De La Soul is Dead, as well as De La Soul merchandise. The rap legends’ recordings came to Reservoir Media through its 2021 acquisition of Tommy Boy Music. Negotiations with Tommy Boy owner Tom Silverman over taking the albums to streaming services had stalled in 2019 over a royalty dispute — but not only did Reservoir quickly hash out a deal with De La Soul to reintroduce the world to its Tommy Boy catalog, it also planned a marketing campaign with the group to create exclusive merchandise and launch a slate of LPs, CDs and cassettes.

Selling directly to De La Soul’s biggest fans has meant 30% of its physical product sold worldwide has gone through the group’s website, wearedelasoul.com, says Rell Lafargue, Reservoir Media COO/president. In the process, Reservoir was able to tap into a consumer group of rising importance in today’s music business: superfans. “Twenty percent of wearedelasoul.com customers are repeat customers in just the first six months of the store opening,” says Lafargue, “and we see superfans fill their carts with multiple copies and color variants of vinyl, shirts, hoodies and more at check out.”

De La Soul fans are part of a trend shaping the U.S. music business in 2023: Superfans’ purchases of CDs, LPs and cassettes to help support their favorite artists helped drive increases in all physical formats in the first six months of the year, according to Luminate’s 2023 midyear report released Wednesday (July 12).

Luminate says 15% of the general population is made up of superfans -- a group of passionate music consumers with a propensity for discovering new music, connecting with artists on a personal level and being part of a community, or “fandom,” that artists provide. They’re valuable, too: Superfans spend 80% more money on music each month than the average U.S. music listener.

While the average consumer may subscribe to a streaming service, stream for free or listen to the radio, superfans purchase physical formats like it’s 1999. Buyers of CDs, vinyl LPs and cassettes are 128% more likely to be super fans, according to Luminate. They also skew young. U.S. millennials and Gen Z music listeners spend 22% and 13% more on music than the average music listener.

The power of superfans helps explain why U.S. physical album sales improved drastically in the first half of the year. Vinyl LP sales were up 21.7% through June 30 -- well above the 1% gain in the prior-year period -- and CD album sales grew 3.8%, a huge improvement from the 10.7% decline a year earlier.

Direct-to-consumer sales increased 20% to 4.4 million units, with vinyl sales specifically improving 25% to 3.6 million units and CD sales growing 15% to 1.7 million. Over 60% of direct-to-consumer sales are current releases — defined as titles 18 months or younger. That number rises to 75% for direct-to-consumer sales for both CDs and cassettes.

Golda Bitterli, vp of sales at Revelator, maker of a technology platform for labels and distributors, attributes the trend to the fans’ access to artists online, particularly on social media. “Fans are becoming more active participants in the artist’s career, including involvement in the creative process like we see on TikTok, as well as direct access to artists through platforms like Telegram,” she says. “This gives the fan a greater sense of connection and stock in the artist’s career and leads to more consumption through streaming, downloads, ticket sales and more."

K-pop superfans are in an entirely different category. According to Luminate, K-pop fans spend 75% more on music than the average U.S. music listener, with much of that spending going to physical products. K-pop fans are 46% more likely to have purchased a CD in the last 12 months, while almost a quarter have purchased a cassette in the past 12 months.

K-pop superfans are on a different level of fandom than the typical fan, organizing and supporting their favorite artists at levels rarely seen elsewhere in music. They buy multiple copies of albums, snap up merchandise and purchase the clothing artists are seen wearing on social media, says Kristine Kim, GM of Korea for business-to-business platform Surf Music. In Korea, fans will even rent out cafes to gather with other fans and purchase billboards to wish their favorite artists a happy birthday. "The investment, the time investment, the energy that they put in — emotionally, physically — and the money that they put in, it's pretty incredible,” says Kim.

In the United States, superfans’ influence can be seen in the uptick in album sales in the first half of the year. K-pop albums, usually made available in multiple versions and formats so superfans can buy more than one copy, accounted for six of the top 10 physical albums and 16 of the top 50 physical albums, according to Luminate. The only artist to outsell K-pop artists Tomorrow X Together, Stray Kids, TWICE and Seventeen was Taylor Swift, who replicated the K-pop approach by offering over 20 different versions of her album Midnights.

For the upper strata of superfans, buying albums goes beyond merely collecting items or listening to music. “What drives these fandoms and CD sales is they just want to support the artists,” says Kim.