Brits spent more than £1.2bn on recorded music in 2017, a year-on-year increase of 9.6% fuelled by the growth of streaming subscriptions.
Figures released by the Entertainment Retailers Association (ERA) revealed that people spent £577.1m on streaming subscriptions, up 41.9% from 2016’s £406.6m. This more than outweighed a 3.4% decline in physical sales to £459.4m and a 23.1% decline in download sales to £165m in 2017.
ERA covers sales and subscriptions, so these figures do not include advertising revenues for music – for example ads on YouTube or on the free tiers of streaming services like Spotify – nor does it include sync, merchandise or live income.
It’s a very positive story for the music industry though: the 9.6% growth in 2017 is nearly double the 4.6% growth in 2016 for consumer spending on recorded-music in the UK. While streaming is the big driver, ERA also noted a 33.7% rise in vinyl sales to £87.7m.
“Where physical really comes into its own is where it offers something distinctive and additional to the content, whether it be the tactile experience of vinyl or the simple fact that physical objects work well as gifts,” said ERA chief executive Kim Bayley.
Alongside the ERA numbers, British industry body the BPI also published some figures for music consumption in the UK last year, which also showed strong growth.
The BPI measures consumption by ‘album equivalent sales’ (AES for short) – the number of albums or their equivalent streamed or bought in physical or download form. It says this metric rose from 123.4m units in 2016 to 135.1m in 2017 – 9.5% growth.
Here too, streaming loomed large. Brits streamed 68.1bn songs through audio-streaming services in 2017, up 51.5% year-on-year. Streaming accounted for 50.4% of all music consumption in 2017.
The BPI also picked out vinyl’s continued resurgence, with 4.1m LP sales in 2017 representing a year-on-year rise of 26.8% in unit terms, to their highest level since 1991. CD sales were down 12% to 41.6m units, while digital album sales fell by 23.4% to 13.8m units.
The BPI’s streaming stats DO include the free tiers of audio-streaming services like Spotify, but they don’t include video streams on YouTube – in this case, because the data comes from the Official Charts Company, which does not include YouTube in its data.
BPI chief executive Geoff Taylor, like other industry executives, continues to walk the line between celebrating the growth, and highlighting the issue of YouTube, safe-harbour rules and the ‘value gap’ as a continued challenge.
“Whilst the rapid growth of streaming and resilient demand for physical formats gives us confidence for the future, it is important to remember that the music industry still has a long way to go to recover fully. Structural challenges must be overcome if long-term growth is to be sustained,” said Taylor in a statement.
“First we must continue to fight the ‘Value Gap’, so that all digital platforms pay fairly for their use of music. Second, government must ensure our musicians are able to tour freely even after we leave the EU. Finally, we should make the UK the best place to invest in new content by forging an online environment that is safe for consumers and where illegal sites cannot flourish.”
We’ll finish back with ERA’s figures for a wider-angle view of the entertainment market in the UK. The body also measures consumer spending on video – retail and rental of physical formats like DVD as well as download sales and subscriptions to video-streaming services – and games.
Games spending rose by 9.6% to £3.35bn in 2017, while video spending rose by 7.5% to £2.69bn, which puts the scale of the recorded-music market into perspective.
The ‘total entertainment’ market of music, video and games in the UK grew by 8.8% to £7.24bn in 2017, meaning that music accounted for just 16.6% of it. But given the music industry’s still-recent decade-and-a-half decline in revenues, executives in our world won’t be downhearted about these comparisons.