Music enthusiasts splashed out a whopping £2.4 billion on streaming subscriptions and tangible music formats in the previous year, marking a historic milestone as the UK music industry finally emerged from the shadows cast by the digital upheaval that birthed online piracy and witnessed the gradual decline of the CD. The Entertainment Retailers Association (ERA) revealed that subscriptions to streaming giants like Spotify, Amazon, and Apple, coupled with the vinyl resurgence, which has seen sales climb steadily for 17 years, propelled music revenues to soar by 7.4%, reaching £2.38 billion.
It took the music industry decades to pivot and bounce back from the dawn of the digital age, which decimated billions in value from the UK sector. Last year's tally surpassed the previous all-time high of £2.2 billion set in 2001. "Music has roared back with a resounding splash, thanks to the surge of streaming services and the vibrant vinyl revival." said Kim Bayley, the ERA's chief executive. "For decades, new releases were the revenue engines. Now, digital platforms and retailers have taken the wheel."
Consumer expenditures on streaming subscriptions surged by 7.8%, crossing the £2 billion threshold for the first time ever. Meanwhile, spending on physical formats—CDs, vinyl, and other formats like cassettes—rose by 6.2% to £330 million. Vinyl album sales outstripped the market with a 10.5% growth, generating £196 million, while CD album revenues stagnated at £126 million.
It's worth noting that these figures aren't inflation-adjusted, suggesting that overall UK music spending might still lag behind the levels documented in 2001. According to the ERA, total album sales hit 201.4 million units, incorporating both physical sales and stream-equivalent albums, with Taylor Swift's "The Tortured Poets Department" leading the pack at 783,820 units. The previous annual album sales record stood at 172 million in 2004, but this was purely based on physical sales. Last week, the British Phonographic Institute, an industry body, released figures showing a 9% jump in vinyl sales to 6.7 million units.
The report revealed a surprising twist in the music industry's fortunes, with CD sales dipping by a mere 300,000 units to reach 10.5 million, coupled with modest sales of alternative formats like cassettes numbering in the hundreds of thousands. This combination propelled total physical music sales to a resurgent peak, marking the first increase in two decades, soaring to 17.4 million units. Despite streaming accounting for a staggering 85% of total UK music revenue and 88% of album purchases, the Entertainment Retailers Association (ERA) maintains a cautious optimism, expecting a hybrid future rather than a purely digital one. "We remain steadfast in our belief that digital and physical mediums are not only complementary but essential for the holistic health of the entertainment market," echoed Bayley.
The music industry's revival, fueled by subscription services, stands in stark contrast to ongoing grievances voiced by musicians and headline acts who yearn for a larger slice of the pie from lucrative tours. Tom Gray, Chairman of the Ivors Academy, a UK songwriters' association, and a Gomez band member, commented, "A record-breaking year, indeed, but for whom? Music creators are still waiting for their fair cut of this triumph. We must urgently readdress the distribution of streaming revenues. The industry collectively foresees the looming threats posed by AI, yet we're still grappling with our own foundational issues."
Naomi Pohl, General Secretary of the Musicians' Union, added, "Tragically, professional musicians, artists, and songwriters are not basking in the glow of this apparent boom... They grapple with numerous challenges, including skyrocketing living costs, stagnant public arts funding, Brexit-induced hurdles in EU tours, and, critically, an unfair share of streaming earnings."
The ERA report also delved into the dynamics of the digital video market, dominated by Netflix, Disney+, and Amazon's Prime Video, along with the gaming sector. Subscription-based digital video services, the largest segment among the surveyed trio, witnessed a 6.9% surge, crossing the £5 billion mark for the first time. Netflix subscriptions alone increased by 8.3%, totaling £4.46 billion, nearly 90% of the sector's total revenue.
Conversely, physical sales of DVDs and Blu-ray Discs continued their downward spiral, plunging 7.9% to £156 million. Deadpool & Wolverine emerged as the most popular title bought or rented by consumers, shifting 561,917 units, with over 80% of these transactions happening digitally.
In the realm of gaming, which witnessed a historic moment last year as it was surpassed in value by the video sector for the first time, a notable decline of 4.4% was documented, shrinking the market to a £4.6 billion valuation. EA Sports FC, formerly known as Fifa Sports, ascended back to its rightful throne as the year's most sought-after game, amassing an impressive 2.9 million sales, with a whopping 80% of these transactions taking place digitally. Commenting on the trend, Bayley remarked, "After years of relentless expansion, it's hardly shocking that the games market has finally hit the brakes. However, it remains a formidable giant, nearly doubling the size of the recording industry."
