According to research in the BPI’s new yearbook All About The Music 2019, UK recorded music revenues are up by over 20% in three years. An official press release stated that the growth was, “fuelled by the popularity of diverse British artists and innovative record label marketing”.
A top line summary showed 3.1% growth in 2018, boosted by the combination of surges in streaming, the enduring appeal of vinyl and the growth of sync. Streaming subscription revenues were up 220% in a three-year window, making it worth nearly £500m and accounting for 60% of income. Similarly, revenues from streaming were reported to be more than double the revenues generated by physical formats.
All in all, it marks the longest period of growth since 1990’s, although the BPI noted that the “total label income of £865.5m still lies well below previous industry peaks”.
For an in-depth breakdown, see below:
UK RECORD COMPANY TRADE INCOME OVERVIEW
The BPI highlighted that UK record company trade income leapt by over a fifth (+21.8%) following three years of consecutive growth since 2015. As stands, the total
industry revenues in 2018 were £865.5 million, reflecting streams and sales of music across all music formats combined with earnings from sync. It marked a rise of 3.1% on the year, and stands at the highest level since 2009, though they are still down on the £1.2 billion post-millennium peak year of 2001.
The revenue increase followed a 5.7% rise in music consumption across all formats, which the BPI reported earlier in January. It broadly translates into a retail value of £1.34 billion according to ERA.
The on-going impact of streaming services was one key contributor to growth singled out, by the BPI with label income being boosted by increased subscriptions to Spotify, Apple Music, Amazon and Deezer, which rose by well over a third (+34.9%) in 2018. This represents an impressive 220% surge in the past three years. Subscriptions by themselves accounted for 54.0% of UK record label income in 2018.
The growth in subscriptions also contributed to an overall 32.8% rise in income from streaming. BPI – who have often been critical of YouTube – stated that, “this would have been greater still had video streaming platforms, predominantly YouTube, generated a great deal more than just £29.7 million in return for an estimated 30 billion-plus annual plays of music videos in the UK.”
The BPI cited that this amount represents “just over half the amount generated by vinyl and further underlines the continuing problem of the Value Gap.”
Revenues from ad-supported streams showed strong year-on-year growth, rising to £19.1 million – up 25.8% on the year.
The outlook for the future remains positive, but there is still a long way to go to recapture lost ground
Geoff Taylor, BPI
While streaming services posted impressive numbers, BPI also noted that the resilience of physical formats should not be overlooked.
Income from vinyl sales, for one, continued to grow – with the £57.1 million generated in 2018 up 3.7% on the year, and well over double the 2015 total of £25.1 million. According to the BPI, vinyl LPs now account for 6.6% of industry income.
Perhaps predictably, revenue of £176.8 million from CD sales was in line with a long-term trend of decline – down by over a quarter (-28.4%) in 2018. The BPI, however, stressed that CD sales remains important to the industry in delivering just over a fifth (20.4%) of its income.
Overall, the picture generated from the physical market is a mixed one. Income generated by physical formats dropped by 22.5%, reflecting the difficult trading conditions experienced by HMV and other retailers on the High Street in the last quarter. The report did observe that like-for-like, year-on-year comparisons were also made more challenging by the huge global success in 2017 of Ed Sheeran’s ÷ and the 1m-plus sales of Rag’N’Bone Man’s debut album, Human. Both are phenomenal successes that distort the overall bigger picture.
The success of British artists – ranging from Queen/the Bohemian Rhapsody soundtrack to George Ezra, Dua Lipa, Paloma Faith, The 1975, Stormzy, Dave and Calvin Harris – was also cited as another key factor in the growth. They were, of course, complemented by the blockbuster soundtrack to The Greatest Showman, both the year’s best-selling album in the UK and around the world. Other movie soundtracks which featured in the year’s Official Charts year-end top 10, such as the cast recordings for Mamma Mia! Here We Go Again and A Star Is Born were also singled out for assisting growth.
Commenting on the overall results, Geoff Taylor, chief executive BPI & BRIT Awards, said: “The recorded music industry in the UK is showing consistent growth, driven by investment in new talent, innovative global marketing, and offering music fans outstanding choice, convenience and value.
He continued: “The outlook for the future remains positive, but there is still a long way to go to recapture lost ground. Long-term growth depends on robust Government action to tackle the Value Gap, promote investment, ensure online platforms take responsible action to reduce infringement, and secure the future talent pipeline by giving state school pupils the opportunity to discover and develop their talent.”
All About The Music 2019 is out w/c March 25 and is free to all BPI members. It can also be purchased from the BPI’s website on publication:https://www.bpi.co.uk/shop/.