The grateful 8%: How music got its groove back in Q1

Geoff Taylor

The Q1 numbers are in – and it was another good quarter for the music industry, Music Week can exclusively reveal.

According to new figures from the BPI, music consumption bounced back from its Q4 slowdown – when growth only inched up 2% – to post an 8.2% increase in Album Equivalent Sales and allay any fears that the music biz revival might be coming to a premature end.

Again, streaming powered that growth, with a 26.2% rise in Stream Equivalent Albums to 26.6 million units. Streaming growth is gradually slowing down as the base grows ever larger – the sector grew 29.5% in Q4 2018  and 31.7% in Q3 – but remains robust enough to suggest the market is a long way off maturity.

For the first month of the period, the UK’s market-leading physical music retailer HMV was on the chopping block, until this week’s Music Week cover star Doug Putman succeeded in his rescue bid in early February.

But, while you might have expected the turmoil to have accelerated physical music’s decline, the figures – while still down significantly – were better than in a dismal fourth quarter. Physical albums in general were down 19.8% to 6.6 million units – a smaller decline than Q4’s 21.2% drop, although worse than Q3’s 15.9%. Within that, CDs were down 22.9% (versus -23% in Q4 and -17.7% in Q3). But vinyl – which had declined 5.5% in Q4 and was up just 2% in Q3 – bounced back, posting a 5% rise. That will encourage Putman, who sets out his vision for going big on vinyl in this week’s print edition.

The real problem child, however, is downloads. Digital albums dropped another 27.3% to just over two million units, and Track Equivalent Albums plummeted 24.1% to just 1.2 million units, meaning the format is all but dead as a commercial force in the UK.

The complete transformation of the UK biz is shown in the shares of AES for each format. SEA now represents almost three quarters of all music consumption (73.1%, up sharply from Q4’s physical-heavy 59.7%, but also from Q3’s 67.4%). Physical albums now account for fewer than one fifth of units (18.2%), while digital albums (5.6%) and TEA (3.2%) are bumping along the bottom.

The overall figures were greeted with enthusiasm by BPI chief executive Geoff Taylor.

“Q4 2018 was obviously a reasonably tough quarter but we’ve bounced back strongly in Q1,” he told Music Week. “Streaming is continuing to drive the market forward. That strong growth overall, with a little boost from vinyl again, suggests that we’re doing pretty well, both in terms of market development and artist development.”

* Music Week previously revealed the biggest selling albums and singles of 2019 so far here. You can read the full breakdown and industry reaction from Taylor, Universal’s David Hawkes, Warner’s Derek Allen and Sony’s Charles Wood in the current print edition of Music Week, available now, or by clicking here. Further analysis will follow in our April 15 edition. To subscribe and never miss a vital music biz story, click here.

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