Physical Music's Resurgence: From Niche to Core Revenue and Brand Channel by 2026

In an evolving music landscape where streaming dominance often overshadows other revenue streams, a compelling argument is being made for the resurgent power of physical music. Thom Skarzynski, a veteran of the music industry with a two-decade career spanning roles at Atlantic, Epic Records, and Spotify, contends that physical music, far from being a relic, is poised to become "a core strategic revenue and brand channel" by 2026. His insights, born from direct experience and strategic triumphs, challenge the prevalent notion of streaming as the sole metric of success, highlighting a significant disconnect between artists' touring power and their digital performance.

The Twenty One Pilots Blueprint: Redefining Chart Success

The campaign for Twenty One Pilots' album Breach in 2023 serves as a pivotal case study for Skarzynski’s thesis. The album achieved over 200,000 total sales and equivalent streams in its first week, marking the highest debut for any rock band in six years and the duo’s first US No.1 in a decade. Crucially, nearly 170,000 of these units stemmed from pure physical album sales, demonstrating a clear preference among fans for tangible products over streaming consumption. This success followed a similar pattern with their 2024 album Clancy, which sold 143,000 units and reached No.3 in the US.

Skarzynski, who collaborated closely with the band's management during his tenure at Atlantic Music Group, points out that many rock bands with substantial touring success often generate only 10,000 to 30,000 in streaming equivalent album sales during release week. He proposes a solution: "What can artist teams do to boost that? Not much. But they can create a beautiful physical configuration – a book, a memento, something meaningful for fans – and package it with a copy of the vinyl or CD to make it chart-eligible," as quoted by Music Business Worldwide.

"A Fandom Game": The Strategic Power of Physical

Skarzynski's conviction in physical music as a powerful alternative revenue stream and chart strategy stems from his observation that streaming has become increasingly difficult to "move the needle" on. He established his New York-headquartered firm, Happiness. Marketing, to bridge the perceived gap between artists who command large live audiences but see disproportionately low streaming numbers. "Physical is a fandom game," he asserts. "It’s driven by intent, emotion, and identity – not passive consumption."

Recent data from Luminate supports this perspective. Luminate’s 2025 Year-End Report indicated that US vinyl sales increased for the 19th consecutive year in 2025, growing 8.6% year-over-year to 47.9 million units. Furthermore, over 40% of vinyl records were sold at independent record stores, and Direct-to-Consumer (D2C) sales now account for 13.6% of all physical albums sold, a 2.1 percentage point increase from 2024. These figures underscore physical music's transition "from ‘trend’ to core fan economy," according to Skarzynski, who predicts that "going into 2026, physical will continue to segment toward D2C, limited editions, tiered offerings, and tour-linked campaigns, supported by smarter infrastructure."

From Major Labels to Spotify: A Synthesized Approach

Skarzynski's extensive career has provided a unique perspective, shaping the foundation of Happiness. Marketing. His journey began in radio promotion, moved into product management at Fueled By Ramen and Epic Records, where he worked on campaigns for Paramore and A Tribe Called Quest, and later saw him join Spotify's artist marketing group during its formative years. He eventually led the sales department at Epic Records, notably contributing to Travis Scott's ASTROWORLD campaign. His time at Sony and Atlantic instilled "scale and accountability," teaching him that "great ideas don’t matter unless they can survive real-world manufacturing, retail, and revenue pressure." Running sales, he learned to think in terms of "units, margins, inventory risk, and long-term demand, not just marketing narratives."

Conversely, his experience at Spotify illuminated "how fans actually discover music, how behavior forms, and how important artist and fan trust really is." This synthesis of major-label rigor and a fan-first approach is the bedrock of Happiness. Marketing. Skarzynski states, "Happiness is built on that synthesis: major-label rigor, fan-first thinking, and a focused, hands-on approach to physical and D2C strategy." His firm aims to embed itself early in campaigns, treating physical music and D2C strategies not as an afterthought, but as primary drivers for artists with dedicated fanbases. This approach directly addresses the industry's challenges with streaming's unpredictability, including less reliable TikTok virality, diminished impact from editorial playlists, and weakened correlation between radio play and streams.

A Collaborative Partnership for Growth

Happiness. Marketing positions itself as a partner to, rather than a replacement for, labels and artist teams. Skarzynski’s day-to-day work involves deep integration into campaign development, “building and pressure-testing forecasts, designing the product mix, locking timelines, and working through manufacturing, pricing, margins, retail and D2C splits, and fulfillment realities.” This hands-on, collaborative method ensures that physical music is not siloed but fully integrated as a core growth engine.

The artists and genres best suited for Happiness. Marketing’s approach are those with "real-world proof of demand" – acts capable of selling tickets, merchandise, and fostering communities, regardless of whether they are emerging or established. The common factor is "intent: fans who want to participate, collect, and feel ownership," as stated by Music Business Worldwide. This philosophy, successfully demonstrated with Twenty One Pilots, underscores a belief that by 2026, physical music will no longer be a secondary concern but a fundamental strategic pillar for artists and the wider music industry.