The music industry appears to have turned a corner, after new ERA (Entertainment Retailers Association) data revealed that the biz grew 4.6% to hit £1.11 billion in 2016, outstripping games (2.9%) and video (2.2%) to become entertainment’s fastest growing sector.
Figures show that the growing adoption of streaming and digital services helped the music, video and games sectors to hit an all-time sales record of £6.3 billion in 2016. That’s a 3% increase on 2015 and a rise of over £1bn on 2012. In total, digital services accounted for 57% of music revenues.
According to ERA data, music streaming in 2016 was up 65.1% on the previous year, generating sales worth £418.5m. Meanwhile, physical sales across the board were down 7.3% year-on-year, totaling £475.4m. CD sales dropped by 13% in 2016, marking a significant downturn since dipping just 3.7% in 2015.
However, vinyl sales in 2016 topped the 3 million mark, spiking 56.4% year-on-year to £65.6m - the format’s highest sales figure since 1991. It was the ninth consecutive year of vinyl growth, with more than 30 titles selling over 10,000 copies each on LP. David Bowie’s Blackstar was the year’s biggest-selling vinyl album and Bowie had four other albums in the Top 30 vinyl albums of the year.
Elsewhere, it was bad news for downloads as sales plummeted 26.8% year-on-year, accruing a total value of £214.6m for 2016.
ERA CEO Kim Bayley said: “The music, video and games industries were understandably nervous about the advent of new digital services, but these figures provide resounding evidence of the benefits of our members’ investment in innovation. To have added over £1bn in new revenues in just four years is an incredible achievement. To put it another way, take away today’s digital services and the entertainment market would be barely a third the size it is today.
“Physical entertainment retailing is clearly off its peak,” Bayley continued, “but it is still a £2.2bn market. The growth of vinyl in particular shows that physical formats can flourish if they offer distinctive benefits. The strength of the DVD and CD formats over the Christmas period shows that physical still dominates when it comes to gifting, for instance.”
Earlier this week, the BPI revealed its 2016 market figures, which were described by chief executive Geoff Taylor as heralding a “new era for music”.