UK music industry body the BPI has published its annual figures for British labels’ trade income – the money that labels actually earn, rather than the ‘retail value’ of consumer spending on music that was reported by fellow body ERA earlier this year.
The unsurprising headline: more growth for labels. Their trade income grew by 7.3% in 2019 to £1.07bn (around $1.32bn), the fourth consecutive year of growth.
As in other countries, streaming was the main driver: British labels’ streaming income grew by 21.8% to £628.9m last year, and now accounts for 58.9% of their revenues – up from 51.9% in 2018.
Within that, labels’ income from streaming subscriptions grew by 21.7% to £568.8m in 2019. In its announcement of the figures, the BPI cited data from global body the IFPI and consultancy firm Media Research to suggest that by mid-2019 there were 19.6 million music subscribers in the UK.
Meanwhile their earnings from ad-supported audio services grew by 29.7% to £24.8m, and their revenues from video streaming services (i.e. YouTube) grew by 18.8% to £35.3m.
One note of caution for the industry: streaming growth is decelerating: from 42% in 2017 to 32.8% in 2018 and now 21.8% in 2019. That’s largely down to a deceleration in subscriptions growth (45.3%, 34.9% and 21.7% over that three-year period).
The wrinkle: growth in video-streaming revenues is bucking that trend: they grew by 6% in 2017, 9.9% in 2018 and 18.8% in 2019. The BPI, however, continues to think that YouTube could and should be paying more.
“Video streaming services failed to close the ‘Value Gap’ in 2019, generating only just over half the income produced by vinyl records,” as its announcement put it, adding in a footnote that in the BPI’s opinion this issue is “the biggest threat to the future sustainability of the music industry”.
Vinyl, on the other hand, is a bright spot still. British labels’ vinyl trade income was £66.3m in 2019, up 16.1% year-on-year (which IS an acceleration of growth from the 3.7% rise in 2018).
In 2019, vinyl smashed past income from downloads, which fell by 28.6% to £58.1m – and has declined from £151m as recently as 2016 thanks to the migration to streaming. Meanwhile, labels’ income from CD sales fell by 19.8% in 2019 to £141.7m.
The BPI also noted that sync income for labels grew by 11.1% to £28.3m in 2019, while public performance income was up 4.4% to £137.4m.
As usual, a comparison between the BPI’s trade income figures and ERA’s retail stats is useful. According to ERA, British consumers spent just over £1bn on subscription streaming in 2019 – a 23.5% rise. That means labels’ share of that spending was 56.7%.
The streaming income deceleration is a topic we’ll return to – the UK is matching the trend in the world’s biggest music market, the US, where streaming subscription income grew by 63.2% in 2017, 32% in 2018 then 25.2% in 2019 – but the BPI is understandably focusing on the positive picture. Last year, UK labels’ trade income was at its highest level since 2006.