UK record company revenues hit five-year high

Revenue for UK record companies hit a five-year high in 2016, according to new data from industry association the BPI (British Phonographic Industry). 

The BPI’s revenue combines streaming, downloads, physical sales and licensing for use in films, TV and computer games.

These were £926 million (A$1.52 billion), which represented a rise of 5.1%.

Despite a 1.9% drop to £300 million ($495.6 million), physical formats remained the biggest revenue maker (32% of spend), compared to £274 million ($452.6 million) or 30%,by streaming services such as Spotify, Apple Music and Deezer.

CDs continued their way to the scrapheap, with their revenue dipping by 9.1%.

Due to high prices collectors are willing to pay, vinyl figures rose by two thirds (66.5%) from 2015, and now account for 15% of physical album turnover and 4.5% of total label revenues. In 2017, vinyl sales were up 35.8% to 865,285.

The vinyl market is now worth 50% of the album download market, or more than 60% of the value of single track downloads.

The BPI says that the 61% rose in streaming turnover indicates that it will exceed physical in 2017.

In good news for record companies, 87.1% of subscription revenue is coming from subscription. Income from ad-supported tiers of streaming platforms represents 3.6%, and video streaming 9.3%.

Music DVD had its best year since 2013, with The Beatles’ Eight Days A Week and the Oasis documentary Supersonic together selling over 350,000 copies.

In the recorded music sync and performance rights ledger, the PPL’s collection was up 1.8% to £174 million ($287.4 million). Sync revenues were rose by 0.6%.

BPI CEO Geoff Taylor was pleased with the data. “It’s encouraging to see revenues rise significantly, as more and more consumers enjoy the benefits of subscribing to a premium streaming service or rediscover the joys of vinyl.”

But he warned that the Government had to protect the music sector.

"Britain’s world-leading music sector has the potential for sustained growth in the years ahead, but this exciting future can only be realised if government makes creative businesses a priority post-Brexit," he said. 

This included negotiating so that UK acts could travel freely across European Union borders, UK music businesses should be able to employ the best talent, and copyright protection is strengthened.

It also noted the "growing mismatch between the huge value that certain digital platforms, such as YouTube, extract from music or other entertainment and the relatively small amount they return back to the creators concerned".

Read more: British music biz looks at a future outside the EU