Record labels association the BPI has officially published its annual yearbook: All About The Music 2018 – and they have announced that the UK record company trade income (revenues generated through sales and streams across all music formats combined with earnings from ‘sync’) had risen by 10.6 per cent in 2017, with earnings standing at £839.4 million.
This huge boost to earnings shows the fastest rate of revenue growth since the height of Britpop way back in 1995, when revenue increased by 10.7 per cent. But it should also be noted that the overall total income remains nearly one third lower than the peak year of 2001, when it topped 1.2 billion.
The large increase last year was driven by a 9.5 per cent leap in music consumption, which the BPI reported on earlier this year. Revenues from streaming grew by 41 per cent, and the format now makes up 46% of industry turnover. Subscription was the streaming channel that added the biggest overall increasing, rising by 45 per cent to £346.9 million. Growth in ad-supported audio and video streaming was smaller, though combined they contributed an impressive £42 million to the record labels turnover.
This figure should have been much higher, were it not for the continuing distortion in the market-place that allows some “user upload” platforms to pay much lower royalties to artists and labels than competing digital music survives. The UK government has pledged to end this “Value Gap”.
2017’s revenue growth was also driven by the success of British artists, both established, such as Ed Sheeran – whose latest album ‘Divide’ was the most-consumed on all formats – Sam Smith and Little Mix, and recent major breakthrough acts, such as Rag’n’Bone Man whose debut LP ‘Human’ sold more than 1 million copies, alongside other exciting solo artists such as BRIT award winners Stormzy and Dua Lipa.
The increased income from sales of physical formats was less expected and is attributable to a number of factors – particularly the continued growth in vinyl LP income (+24%), which is now a fifth of the size of the overall CD market, and the impact of big-selling titles in boosting resilient demand for CD..
Geoff Taylor, Chief Executive of the BPI & BRIT Awards, said of the new figures: “The changes labels have made to their business models and their investment in new talent have borne fruit with rapid revenue growth in 2017. We are likely to see a continuing rise in 2018, with increasing awareness among consumers about the benefits of music streaming, and new developments that are likely to encourage the uptake of subscriptions, such as the launch of YouTube’s premium music service and the growing popularity of smart speakers in the home. While these are reasons for optimism, music still has a long way to go to recover fully and achieve long-term sustainable growth. In particular, Government action is needed to remedy the continuing “Value Gap”, so that all digital platforms pay fairly for their use of music, and with the transition period following Brexit now agreed, it is vital that British musicians can tour freely in the EU once we leave. In addition we urge Government to seize the opportunity of its Digital Charter to forge an online environment that is safe for consumers, where illegal sites cannot flourish, and to look at new incentives for investment so that the UK is the best place in the world to invest in creating music. These measures are essential given the increasing competition the UK faces in a more global streaming market.”
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