STREAMING helps mUsic cross 50% digital threshold

The UK music business hit a significant milestone in 2013, with digital revenues accounting for 50 per cent of total UK record industry trade revenues, according to the annual review by the BPI, the UK music body.

Income from music streaming services such as Spotify and Deezer constituted the fastest-growing sector of recorded music revenues over the twelve month period. Streaming revenues increased by 41 per cent. This was driven by the three main constituent elements of streaming: subscriptions to premium services, ad-supported 'free-to-consumer' streaming, and Cloud-related services combined to generate around £77m for record companies in 2013.

Subscription was the most important component, worth £54.7m and accounting for 71 per cent of the sector's income. Ad-supported services, which enable 'free-to-consumer' streaming, grew by 31 per cent on 2012, contributing £19m to industry revenues, while Cloud-related services, such as Google, Apple and Amazon's locker services are now beginning to produce meaningful revenues, contributing over £3m to industry income last year.

Boosted by the success of new British artists including Bastille, whose debut Bad Blood was the biggest-selling digital album by an artist in 2013, revenue from download albums showed strong growth in 2013 - up 19.5 per cent on the previous twelve months to £160.5m. Revenues were in part boosted by the increasing proportion of sales accounted for by digital compilations and 'premium' or 'deluxe' album editions such as Beyoncé's self-titled release, which came out exclusively on digital format towards the end of the fourth quarter.

Whilst it did not match the record levels seen in 2012 (down 4.4 per cent on the period), record company income from downloaded tracks remained strong at £121.7m - the second-highest total of all time.

Although revenue from sales of CD albums and singles and music videos declined by 6.4 per cent to stand at £365.4m, this rate of decrease was better than expected by most commentators, and it should not be overlooked that physical formats still account for half of UK recorded industry revenues. Within this trend there was again a strong showing from vinyl LPs, which saw revenue growth of 49 per cent to reach £12.1m. This figure represented 2.4 per cent of total album income in 2013 - the highest level of annual income for the format since 1994.

Tony Wadsworth CBE, BPI Chairman, said: 

“After over a decade of digital transformation we are now seeing the transition of the recorded music business reach a significant milestone and a return to revenue growth. This was only ever going to happen if we give the consumer what they want, and the continual support given by artists and labels to new ways of enjoying music means that music fans can enjoy more choice and better value than at any time in history.”

These figures represent UK record industry revenues from digital and physical music.  All figures exclude VAT and retailer margin, and in the case of physical product are net of retailer returns.  They exclude income from broadcasting and public performance licensing from PPL and earnings from synchronisation ('synch') deals, premiums and ‘360 degree’ multiple-rights deals with artists.