Back in black.

VINYL RECORDS DEFY DIGITAL AGE, WITH SALES DOUBLING '96 LEVELS

Remember vinyl records? Those black, 12-inch platters with grooves in them? They were supposed to be extinct by now, destroyed by the might compact disc, relegated to dusty second-hand shops and spun by only the most hardcore nostalgia buffs.

Well, not so fast. In a musical trend as unlikely as the revival of '50s-era cocktail music, the vinyl record is making a comeback.

Some 2.2 million vinyl records were sold in the United States in the first six months of 1997 - double the 1.1 million units sold in all of 1996, and up from just 625,000 in 1994, according to SoundScan, which tracks music sales for the U.S. recording industry.

In dollar terms, sales of vinyl albums and singles are projected to reach $96.3 million this year.

"We're surprised at how big the market has gotten," said Steven E. Sheldon, general manager of Santa Monica-based Rainbo Records & Cassettes, the largest vinyl record-pressing plant on the West Coast (the firm also manufactures CDs and cassettes). "We thought it would just be a small niche. But it's turned out to be a big part of our business."

Most of Rainbo's vinyl business comes from independent record companies specializing in hip-hop, techno and dance music. Although most major-label artists are only released in compact disc or cassette formats, the large record companies do occassionally issue major releases on vinyl. Island Records released U2's "Pop" on vinyl, for example; and Elektra Records recently issued a vinyl edition of Jewel's hot-seller. "Pieces of You."

Sheldon said he expects vinyl to comprise 26 percent of Rainbo's approximately $10 million in sales this year - a 20 percent jump from 1996.

Of course, vinyl records still represent a minuscule slice of total U.S. music sales - slightly more than 1 percent. And despite the huge jump in sales expected this year, no one is predicting that vinyl ever will overtake the compact disc and regain its title as the music industry standard.

But the resurgence of the LP nonetheless is notable - especially considering that until quite recently, it was all but given up for dead.

For decades, 12-inch records comprised the overwhelming bulk of U.S. music sales. Despite forays by reel-to-reel tapes and cassettes, the sound quality and convenience of LPs went virtually unchallenged. Besides, they were cool, with covers and gatefolds that were treated by fans as bona fide works of art.

But that began changing in 1983, with the introduction of the compact disc. Not only was the new digital format more durable than vinyl, but the jewel boxes were undeniably cute and the industry loudly boasted that the compact disc's sound quality was superior as well.

By the late 1980s, music fans not only were buying new albums on disc, but were re-purchasing CD versions of their favorite LPs. Turntables went into storage or were unloaded at garage sales. Vinyl-philes could do little more than stare longingly at the gatefolds of their cherished copies of "Sgt. Pepper" or "Led Zeppelin IV" and sigh.

Things got so bad that in 1989, Rainbo - which has been pressing vinyl records in Santa Monica since 1937 - considered bailing out of the vinyl business altogether. Instead, the company sold 14 of its 28 presses to a manufacturer in Russia and shifted the bulk of its production to cassettes and CDs.

"The business was dead," recalled Sheldon. "But we decided that we want to press the last vinyl record, whenever that day comes."

Fortunately for Rainbo, few of its competitors shared that kind of commitment. As the number of U.S. pressing plants dwindled to it mere handful, Rainbo found itself one of the few facilities able to fill large orders.

That ability began coming in handy about five years ago, when a number of different trends began to converge.

First, rap music exploded, going from a strictly inner city art form to a hot-selling, mainstream phenomenon. At the same time, record companies began doing a brisk business in 12-inch singles, featuring extended and/or remixed versions of songs, particularly in the increasingly popular dance and techno music genres.

Meanwhile, a growing number of serious music listeners began believing claims by audiophiles that although compact discs are durable and convenient, their sound quality actually is inferior to that of vinyl records, which provide a more accurate reproduction of a performance.

"It's a better sound quality - there's no question about that," said Kenneth Law, vice president at Keysor-Century Inc., a Santa Clarita-based vinyl and plastics manufacturer which, among other things, supplies raw vinyl to record-pressing plants. "The range is wider; the lows are lower and the highs are higher."

These days, LPs and singles retail for between $8 and $12 each - a considerable discount compared to the $13-$18 typically charged for a new compact disc.

That price difference does not reflect production costs. At Rainbo, for instance, it costs about $1.20 to make a fully-packaged LP, compared to about a buck each for CDs.

The cost of manufacturing CDs has plummeted, according to Sheldon, as a result of oversupply. There are currently more than 70 pressing plants in the United States, and they compete viciously for business.

"There is a ton of capacity for CDs," Sheldon said. "Supply is double the demand."

That's a far cry from the vinyl record business, where only a handful of suppliers remain. "The guys who stuck it out are doing great," said Sheldon.

Rainbo currently runs two shifts a day in its record-making division, stamping out about 15,000 records (LPs, singles and extended play singles), compared to about 20,000 compact discs a day.

The renewed interest in LPs has spilled over into other areas of the music industry, as well.

"We're doing a decent business in turntables, needles and cartridges," said Start Newman, a salesman at Shelley's Stereo-Video in Santa Monica. "We've noticed quite it few younger people buying them, people who until recently had never heard vinyl. It's always quite a revelation."

Added Mario Romero, manager of Aron's Records in Hollywood: "We've always sold vinyl (records), but in the last two years, they've made a huge surge. The hip hop crowd always stuck to vinyl - that's been the biggest market."

Romero said vinyl albums and singles now account for about 35 percent of his total sales.

The vinyl trend has been driven largely by independent retailers like Aron's, as opposed to the major chains, said SoundScan CEO Mike Fine.

"The independents have realized that the chains and mass merchants have cut down on their (vinyl) inventory and this is an opportunity for them to have something that their competitors do not," he said.