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UK music market is strengthening, but needs government support, says BPI

By | Published on Thursday 18 May 2017

BPI

UK record industry trade body the BPI has released its annual report on the British music market, ‘All About The Music 2017’, packed full of interesting stats and just the smallest amount of moaning about safe harbours.

With British recorded music revenues rising by 6% in 2016, there is plenty of room for being upbeat in the report – though in his intro BPI boss Geoff Taylor warns not to assume that continued growth is assured. Not least because we still do not know what the effect of Brexit will be on the music market.

“These figures illustrate the intense global competition, in particular from the US, that UK artists now face in the streaming era”, says Taylor in a statement. “While UK acts continue to perform well overseas, the rising share of US artists in the singles market demonstrates that future success cannot be taken for granted. British labels will need to further intensify their world-leading A&R efforts and government should take swift action to encourage such additional investment, by introducing tax credits for music recorded in the UK”.

As we already knew, the increased revenues were largely aided by a boost in subscription streaming, up more than 60% year-on-year and now accounting for 25.8%. Subscriptions brought in £238.6 million in 2016, over £146.1 million in 2015. However, ad-funded streaming saw revenues drop by just under 60% from £24.4 million to £9.8 million, breaking a run of steady growth since 2008.

Also down were revenues from physical releases, but only marginally – the percentage drop coming in at 1.9%. This slowing seems tentatively to show that a demand for physical media remains. Physical still accounts for 32.2% of revenues, while at 4.5% of the total, vinyl is currently bringing in more than ad-funded and video streaming combined. Sales of albums as downloads, meanwhile, dropped by 30% in the same period.

As we learned at last year’s CMU Insights conference at The Great Escape, people have various reasons for still buying music in physical formats – and not simply that they’re old and refuse to change. With 47 million CDs sold in the UK last year, it may be a much smaller market than it was 20 years ago, or even a decade ago, but still one worth understanding.

In terms of artists, it was David Bowie who came out top of the best-sellers list. Having died in January 2016, demand for his music continued across the year. This could be a cause for concern, in that you can’t pin your hopes on someone incredibly famous dying to boost your revenues every year. Though with Adele, Drake, Little Mix and Coldplay sitting closely behind him, it does at least show that the industry still has the ability to build new, successful stars.

In terms of individual albums though, ‘Now That’s What I Call Music’ volumes 95 and 93 were the top two best-selling of 2016. What happened to volume 94, you ask? Don’t worry, it’s right there at number four in the chart, below Adele’s ’25’. Although, at number one, ‘Now 95′ only sold 0.9 million copies – a way off the 2.5 million ’25’ sold in 2015. David Bowie’s highest charting album, his final record ‘Blackstar’, is at number nine.

In the singles market, as referenced by Geoff Taylor above, it’s US artists who dominate, taking up seven spaces in the top ten. Calvin Harris is the only British act to appear, and then you could argue that ‘This Is What You Came For’ is really a Rihanna song. Topping the list is Drake, with ‘One Dance’, which was also the most-streamed track of 2016. The album it comes from, ‘Views’, was the second most-streamed album, after Justin Bieber’s ‘Purpose’.

“This is an exciting time for British music as more fans enjoy today’s new artists and also explore the infinite jukebox available on streaming services”, says Taylor, launching the report. “Consumption and revenues are on the up, powered by investment and innovation that is driving streaming subscriptions, whilst recordings on vinyl and CD continue to demonstrate their enduring appeal. The UK punches above its weight as the world’s third largest market, responsible for one in eight albums sold globally, including four of 2016’s top 10, and is the second-largest digital and streaming market after the US”.

“But for this success to translate into long-term growth, key issues must be overcome”, he continues. “Brexit risks new EU barriers for UK acts, who also face stiff competition from overseas artists on global streaming platforms. And revenue growth is still undermined by UGC platforms using music without paying fairly for it and the absence of proper IP protection in many export markets”.

Returning to his plea to the politicians, he concludes: “Our business will only reach its full potential if government makes the creative sector a high priority in trade negotiations and offers the same kind of support to investment into music, such as through tax credits, as it has to the film and games industries”.

‘All About The Music 2017’ is available from the BPI website now, and is free for BPI members. Meanwhile, we’ll be looking at UK music sales overseas and the Brexit issue at the BPI supported Export Conference at CMU Insights @ The Great Escape tomorrow.



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