As president of the largest manufacturer of professional-quality audio cassettes in the country, Steve Stepp is constantly asked how it happened—how did National Audio Company (NAC), founded in 1969, stick around long enough to enjoy this recent resurgence of audio cassettes in the music industry?
“We hear from people and have visitors from all over the world all of the time,” said Stepp, who founded the company together with his father and now runs it together with his son. One particular experience struck him: the factory received a group of visitors from Poland. Stepp recalled that one of the visitors said, “Do you realize the emotional attachment that the Polish people have to the audio cassette tape?
“Back when we were behind the Iron Curtain,” he told Stepp, “you couldn’t broadcast radio, couldn’t broadcast TV into Poland—it was all jammed. Written things were examined carefully at the border. But you could smuggle in audio cassettes. They were small, they could fit in your pocket, in the lining of a lady’s purse, and so on.”
The gentleman told Stepp that Polish people relied on these audio tapes to get free information from the outside world. “People in Poland, they not only like the audio cassette; they love it. They are emotionally attached to it,” Stepp recalled. “And I thought, boy, you never know what you’re doing and what emotional effect it may have on other people until you hear it in their own words.”
It’s one of Stepp’s strongest memories associated with audio cassette tapes, and unexpectedly, it isn’t linked to music. In fact, NAC’s core business was for many years not related to music. Good fortune and timing that seemed to go against the industry ended up being what saved the company—and the technology of producing audio cassette tapes.
American Industry
Some assume the company had been a small hold-out during major shifts in the music recording industry and was dealt a boon with the nostalgic return of the audio cassette. But that isn’t what happened at all. NAC’s trajectory has been a steady one fueled by human relationships and fateful timing.
Stepp’s father had been a partner in a background music systems business—installing elevator music and the like—and sold his share of the company when Stepp was in college. In the late 1960s, they’d noticed that radio stations were automating at the time, going from vinyl records to reel-to-reel cartridge tape. So, they started a business selling reel-to-reel blank tape loaded in broadcast cartridges. These were manufactured by Ampex, a big tech company in Alabama making most of the high-grade tape in the world.
Soon after, an Ampex representative gave Stepp his first look at an audio cassette tape—what looked like a small, “doll-sized” version of the reel-to-reel tape they were selling. Stepp couldn’t imagine there would be demand for such a thing, but the next few years would prove him wrong. NAC would seek out multiple manufacturers to be able to keep up with the popularity of the audio cassette.
Stepp realized the company needed a cassette-loading machine if it was to keep up with demand, and in 1980 it purchased its first machine, which was delivered in the middle of a blizzard at night by the man who had built the machine himself, and his wife. Satisfied with the investment, Stepp thought the company would never need another one. Two years later, it had 16 of them.
In retrospect, Stepp said, NAC was in on the ground floor of testing and using American-made audio cassette-related machinery.
And over time, customers began asking NAC if it could duplicate recordings as well, mostly instructional materials and books on tape. Then, around 2005, small, independent bands and record labels approached NAC to do small runs of a few hundred tapes, jobs too small for the big companies to take on. Pearl Jam’s 20th anniversary box set was by far the biggest music job, with all 15,000 boxes selling out by pre-order. By around 2007, Ampex had closed its factory, so now NAC was selling cassettes, manufacturing cassettes, and duplicating tapes.
The CD came onto the scene in the 1980s and rose in popularity, but NAC was relatively unaffected. It dealt with books on tape, instructional materials on tape, magazines on tape, and Library of Congress material for the visually impaired. It had little stake in the music business. Demand was not NAC’s biggest problem.
It was around this time that American manufacturing had gone the route of offshoring, and Stepp realized that the sources of cassettes were quickly going away. There were some foreign manufacturers, but they were few, and the quality ones were even fewer. But the main problem was that no one was building any new manufacturing equipment.
“We began to wonder, how are we going to keep this thing going?” Stepp said. “Is the business going to leave? Is the actual technology going to die?”
By around 2010 to 2012, U.S. manufacturers had “fully panicked and gone out of the business,” Stepp said. This meant, however, “that the equipment that they’d had was available for the having.” Stepp and his head technician traveled all across the country, visiting all the duplication businesses who’d done work for the major record labels and now needed to get the cassette equipment off their floors to put in CD replication machines.
“We bought 53-foot trailer loads of duplication equipment, cassette loaders, and so on from those folks,” Stepp said. In effect, NAC had bought up all of the production capacity of all the major record labels in the country. People laughed. It looks like a wise decision now, Stepp said, but it looked like a tremendously foolish gamble at the time.
A Healthy Dose of Stubbornness
Demand for audio cassettes had not ever really gone away. Around 2015 and 2016, media coverage about the return of the audio cassette emerged, fueled by independent music and younger listeners who had been raised on MP3s and digital music and now wanted analog sound. Unbeknownst to the listeners, NAC was running out of tape.
“In 2016, we finally were notified by the last of four manufacturers that ‘we’re going to quit making cassette tape.’ There it is again—we’re at the end of the rope. What do we do?” Stepp pondered. It was actually election night, he recalled, and he and his son looked at each other, wondering what they were going to do.
“Are we going to get out of the business, or are we going to make tape?” Stepp said. “Now, we’re a little bit bullheaded. My family came over from Ireland in the potato famine, and back in those days, you just had to dig in and get the job done, and that has stayed put with our family.”
So they decided to make tape. NAC began tracking down the equipment used by American manufacturers: machines that had already been converted into magnetizing credit card strips and parking tickets. Stepp bought up those machines and restored them to their 1968 condition for manufacturing tape, and he managed to get in touch with the original experts in tape manufacturing that had been guiding forces in the field. Again, it was fortuitous timing, Stepp said. Making tape is perhaps the most specialized and difficult part of the cassette-manufacturing process, but if the company had not doubled down and resolved to do it in 2016, those experts, already in their 70s and 80s, might not have been around to teach them a few years later.
NAC’s audiobooks business went away after the industry went digital, but the music business continued to grow, booming during the pandemic. Today, the company serves over 5,000 independent record labels worldwide, in addition to all the major labels. “We still deal with most of those people we’ve dealt with from the very beginning,” Stepp said. “There is a personal friendship with these people. We helped them do what they have done and they helped us to do what we’ve done, … and that is something that doesn’t go away.”
Facts and Figures
Over 44 million feet (8,333 miles) of cassette tape loaded each day
Over 2,125,915 miles of cassette tape loaded every year
700 tons’ worth of cassette shells produced annually
This article was originally published in American Essence magazine.
