March 7, 2017:Beyoncé bonus: ERA Yearbook reveals UK Lemonade downloads success

Beyoncé bonus: ERA Yearbook reveals UK Lemonade downloads success

Tidal’s streaming exclusive on Beyoncé’s ‘Lemonade’ may have been an important factor in the album’s high download sales in the UK in 2016.

At least, that’s our reading of the Entertainment Retailers Association (ERA)’s latest Yearbook report, which includes some interesting figures on the British music market last year.

‘Lemonade’ was not the biggest-selling album of 2016 – that was NOW 95 with its combined sales of 908,492. Nor was it the most-downloaded – Adele’s ’25’ pipped it to that title by around 2,000 units, but that album was released in 2015.

Beyoncé’s album was bought as a download 190,206 times last year in the UK though, outstripping its CD sales of 113,845, and eclipsing its ‘album-stream equivalents’ of 29,922 units, as revealed in the ERA Yearbook.

The latter is no surprise: Tidal bagged the streaming exclusive on ‘Lemonade’. Fans could buy the album directly from Tidal too, but it was also available on Apple’s iTunes Store and Amazon’s MP3 store among other outlets for download.

ERA does not break down sales by retailer, sadly: while it is tempting to assume that iTunes took the lion’s share of the download sales for ‘Lemonade’, the heavy publicity around Tidal’s streaming exclusive could have spurred sales from that platform too.

Music Ally talked to ERA boss Kim Bayley about the implications. “We have always said that exclusives don’t really generate value in the market overall – they just move the pie around a bit,” she said.

“I have four teenagers who don’t subscribe to Tidal and they all went with purchasing a download album and putting it in their iTunes library.”

ERA’s figures show that the album downloads market in the UK slipped 27.2% in value terms (to £127.7m) and 29.6% in unit terms (to 18.1m) in 2016, thanks to the ongoing transition from ownership to access.

“The digital bundles market was hit particularly hard in 2016, wilting badly under the cannibalising effect of a UK music consumer rapidly substituting spend on downloads for spend on streams,” its report reads.

Could the ‘Lemonade’ streaming exclusive on Tidal have given the ailing downloads sector an adrenalin shot, then? “When you look at that, it’s just a weird dynamic,” said Bayley.

The ERA Yearbook, which aggregates spending on music, games and video, has plenty of other talking points.

Across those three sectors, online accounted for 77.7% of consumer spending – rounded up to 80% in ERA’s announcement. That breaks down to 72.4% for music, 73.1% for video and 83.2% for games.

The total value of these three markets grew by 3% to £6.3bn in 2016 – the second year in a row where all three categories grew, and the fourth in a row where overall entertainment spending was up.

The messaging around the ERA Yearbook this time last year was “physical fights back” thanks to an increase in the number of physical stores selling music, video and games. A year on, does the ‘online’ stat mean physical retail is endangered again?

“To be fair, we have been moving to that position online for some time. 80% sounds huge but we have been in a position for several years where approximately half the world is digital and a huge chunk of business is done online through services like Amazon,” said Bayley.

“It is another milestone, but physical still has a really important place in the market: and especially with music where physical is still a big part because it is collectable.”

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The other wide-angle finding from ERA’s new Yearbook is that spending on ‘access’ based services has overtaken that on ‘ownership’ of entertainment.

“For the first time in 2016 Britons spent more on accessing entertainment via subscription services from Netflix, Amazon, Spotify, Google Play, Sky and Apple Music and mobile apps like Pokemon Go than they did buying it permanently on disc or download,” is how ERA put it, with 51.3% of entertainment expenditure now on access.

The caveat here is that the gaming part of that carries a lot of weight: 56.6% of gaming spend counts as ‘access’ – £1.67m – while music’s overall figures are lower (so even with 62.2% of music spending in the UK still for ownership, that’s still just £690m by comparison).

“We are becoming a subscriber nation and people are getting very used to subscribing for all of their content through monthly payments or one-off payments to access a game,” said Bayley.

“That will continue, but that doesn’t stop the side of the market that still wants to gift a product or own a product as they will still buy physically. What gets lost is the digital content to own.”

“If you can access everything you want in one place and for one monthly payment, why would you pay to subscribe to a little part of that? We are existing between a physical-collector world and an access-via-subscription world.”

ERA says, however, that growth in consumption and growth in revenue is moving in lockstep: at present there is no headache in store of depleted average revenue per use (ARPU) due to a massive increase in access-based consumption.

“Last year, the volume growths were not any bigger than the value growths in music, so it’s not making an awful lot of difference as you have subscribers doing very different things” said Bayley.

“Some might only consume 50 tracks a month and others will be consuming thousands. Overall the volume and value growth are keeping pace with each other. It’s just a different mix. As we move more to access, those value growths will continue keeping pace with the volume growths.”

While trade bodies often try to accentuate the positive aspects of their industries, ERA has not held back in pointing out parts of the entertainment-retail business that it feels are falling short. For example, using the phrase “wilting badly” about the album downloads market.

“There are several things going on here. The album – for some consumers – is less relevant now as they consume on a track basis or an artist basis, but they are not always thinking about albums. They are jumping across between lots of different artists,” said Bayley.

“There is also Apple migrating some of its consumers from iTunes to Apple Music. But others are moving because it seems to offer better value. Why would you download an album for £10 when you can have a monthly subscription to every album in the world for the same price?”

ERA’s report also uses lines like “desperately thin artist-album releases” when describing 2016, as well as “stagnation in fresh A&R” to explain a year perceived as a poor one for new talent breaking through.

Labels may disagree, but Bayley said that the challenges here are about macro market processes more than they are about how A&R departments operate.

“I think it has nothing to do with apathy [i.e. labels seeing growth in recent years and starting to relax] and everything to do with the fact that big hits will follow a pattern. It is harder and harder to break new artists these days – which is part of the streaming mechanic,” she said.

“With streaming, consumers tend to play the stuff they know, so the biggest acts get bigger. I don’t think labels are apathetic. I think they are trying as hard as they have ever tried to break artists.”

The challenge now lies, she added, with labels and retailers of all stripes as well as streaming services working better together.

“If we crack that and we manage to promote more new artists then the growth rates in the consumer market will probably be higher than currently. Retail generally is feeling very positive,” said Bayley.

“There is still a lot the industry can do to make it grow faster and keep the physical business alive – which is important for huge chunks of the market. We are feeling really positive and we just need to improve things next year – [especially] in regard to catalogue and promoting new artists better.”

This all comes, of course, at the same time as the Official Charts Company is predicting more than 500k first-week sales for Ed Sheeran’s new album ‘÷’ in the UK alone, far outstripping the 143k total of last year’s biggest first-week seller, David Bowie’s ‘Blackstar’.

“There has been a bit of a lack of new product out there, so when someone comes along, like an Ed Sheeran or an Adele who puts something out that grabs everyone’s attention… [the market benefits],” says Bayley.

“We haven’t had something like that for a while so everyone has jumped on that.”

Eamonn Forde
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