Third year of consecutive growth in UK record label income, boosted by surging subscription streaming21 March 2019 - Press release
BPI’s new yearbook “All About The Music 2019” reports UK recorded music revenues up by over 20% in 3 years – fuelled by the popularity of diverse British artists and innovative record label marketing
3.1% growth in 2018, boosted by continuing surge in streaming, enduring appeal of vinyl and growth of sync
Streaming subscription revenues up 220% in 3 years; now worth nearly £500m and accounting for 60% of income
Revenues from streaming are now more than double the revenues generated by physical formats
Longest period of growth since 1990’s, but total label income of £865.5m still lies well below previous industry peaks
Future outlook is positive, says BPI CEO, but Government must require responsible action on piracy by online platforms, and make that sure state school pupils get the chance to make music
The BPI, the UK record labels association, next week publishes its annual yearbook All About The Music 2019 – with the encouraging news that UK record company trade income has leapt by over a fifth (+21.8%) following three years of consecutive growth since 2015.
Total industry revenues in 2018 of £865.5 million, reflecting streams and sales of music across all music formats combined with earnings from ‘sync’, rose 3.1 per cent on the year, and now stand at their highest level since 2009, though they are still down on the £1.2 billion post-millennium peak year of 2001. The revenue increase follows a 5.7 per cent rise in music consumption across all formats, which the BPI reported earlier this year, and broadly translates into a retail value of £1.34 billion according to ERA.
Label Income was boosted in particular by the continuing increase in subscriptions to streaming services, such as Spotify, Apple Music, Amazon and Deezer, which rose by well over a third (+34.9%) in 2018 and which has seen a dramatic 220 per cent surge in the past three years. Subscriptions by themselves accounted for 54.0 per cent of UK record label income in 2018.
The growth in subscriptions contributed to an overall 32.8 per cent rise in income from streaming. 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. This represents just over half the amount generated by vinyl, which, for all its recent growth, remains something of a niche format, 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 per cent on the year.
Income from vinyl sales continues to grow – with the £57.1 million generated in 2018 up 3.7 per cent on the year, and well over double the 2015 total of £25.1 million. Vinyl LPs now account for 6.6 per cent of industry income. Revenue of £176.8 million from CD sales maintained its long-term trend, down by over a quarter (-28.4%) in 2018, but remains important to the industry, delivering just over a fifth (20.4%) of its income.
Overall, income generated by physical formats dropped by 22.5 per cent. This reflects the difficult trading conditions experienced by HMV and other retailers on the High Street in the last quarter, while ‘like-for-like’ year-on-year comparisons were made more challenging by the phenomenal global success in 2017 of Ed Sheeran’s Divide album alongside the outstanding 1m-plus sales of Rag’n’Bone Man’s debut album, Human.
Last year’s growth was also driven by the success of British artists, ranging from Queen, whose catalogue found new audiences through the global success of the Bohemian Rhapsody film biopic, to acts including George Ezra, Dua Lipa, Paloma Faith, The 1975, Stormzy, Dave and Calvin Harris, who are now firmly established alongside the likes of Ed Sheeran and Sam Smith as major international stars. The soundtrack to The Greatest Showman, the year’s best-selling album in the UK and around the world, made a key contribution to income, alongside 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.
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.
“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 the latest edition of the annual BPI yearbook, now in its 40th year. Featuring an introduction by BPI CEO Geoff Taylor, it gives a detailed insight into the year in UK recorded music in 2018 through facts, figures and analysis. It fully evaluates music consumption and trends, with chapters covering sales, market breakdowns, consumer behaviour, retailing and how British music is performing in the world market, along with many other insights.
“ALL ABOUT THE MUSIC 2019” is out w/c 25th March. It is free to all BPI members but can be purchased from the BPI’s website on publication: https://www.bpi.co.uk/shop/