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Digital drives UK recorded music revenue growth

By Andy Malt | Published on Wednesday 19 February 2014

Everyone can have an extra top up of their champagne at tonight’s BRIT Awards. Well, except all the ex-alcoholics, they can have double fizz in their water.

Ahead of today’s big backslapping bash, record industry trade group and BRIT operator the BPI announced this morning that recorded music revenues in the UK were up 1.9% year-on-year in 2013 – that’s up to £730.4 million from £716.8 million in 2012. This stat continues a theme that has occurred in a number of markets in the last year: that the decade-plus decline of the record industry is coming to an albeit slow end.

And, as with most other countries that have seen growth, the UK record industry’s recovery is largely thanks to the continued increase in digital revenues, which now account for 50% of total income. The largest increase came from streaming, with revenues in that sector up 41% in 2013 to £77 million. The bulk of this, £54.7 million, came from subscriptions, while ad-supported streaming paid out £19 million and locker services (such as Apple’s iTunes Match) contributed over £3 million.

Contrary to what some might expect from such an increase, digital album sales also showed a strong increase last year, up 19.5% to £160.5m, though single track sales fell 4.4% to £121.7 million. Meanwhile, although revenues from physical sales, as expected, fell again last year, the decline was not as fast as some previously predicted, coming in 6.4% lower than in 2012 at £365.4 million (compared to £359.2 million for digital income – so actually, physical is still ever so slightly ahead, but it’s basically 50/50).

Vinyl continued to see its revenues grow, leaping 49% in 2013. Though before you write your 700th ‘resurgence of vinyl’ feature, this amounts to £12.1 million, or 2.4% of total album income. Though that is vinyl’s highest annual cash haul since 1994, so maybe you can write that article after all. Knock yourself out. We’re all looking forward to reading it.

Obviously thrilled at the news, BPI chief exec Geoff Taylor ran to the top of the nearest hill and shouted: “The UK’s record labels have re-imagined their businesses for a world of instant mobile, global access to music, driven by social media. Rapid growth from digital albums and music streaming services such as Spotify powered a rebound in revenues in 2013. This will further boost investment in talented British artists like Arctic Monkeys, Bastille, Rudimental and Ellie Goulding, who will reach a global audience tonight as the BRIT Awards is streamed live around the world”.

Pausing to catch his breath for a moment, he then added: “With digital increasingly becoming its key source of revenue, Britain’s music industry is fit and ready to seize the global opportunities it offers”.

It’s worth mentioning that while the overall increase here is very slight, after years of decline, these figures don’t include sync and public performance income or, crucially, any other revenue streams that labels are now sharing in via 360 degree type deals. So, that’s all a bit upbeat isn’t it? Get ready to seize all those opportunities, just as soon as you’ve shifted that hangover tomorrow morning.