The British Phonographic Industry (BPI) association have published data showing UK music industry revenues grew 5.1% overall in 2016.
London, 13th April 2017 – UK record company trade income1 – the combined revenues generated through streaming, sales of music across physical and download formats, performance rights, and ‘sync’ music licenced for use in film & TV, games and advertising – rose by just over five per cent (5.1%) in 2016, reports labels’ association the BPI. Trade income of £926 million represents the largest annual total in five years.
The £44.6 million trade income rise on 2015 was driven largely by the dynamic growth in streaming revenues – a 61 per cent increase which more than offset the decline in income from physical formats and downloads. It also meant that streaming accounted for 30 per cent of overall label revenues in 2016 (compared to physical at 32 per cent). Such a rate of growth will undoubtedly see the format overtake physical to become the leading contributor to label revenues in 2017.
Revenue growth was largely experienced in Q2 and Q3, whilst Q4, traditionally the industry’s biggest sales period, grew by only 0.4 per cent, although that compares to Q4 2015 which included the release of Adele’s album 25.
Whilst the increase in revenues is to be welcomed, there remain a number of structural challenges that inhibit growth, including illegal websites and the “Value Gap”. The latter term describes 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.
The industry’s performance of £926 million income comes as a five-year high and follows recent growth trends recorded in a number other markets as well.
Of particular interest in the figures the BPI released. Streaming media grew to a market share of 30%, leaving it only just marginally behind physical media which recorded an overall revenue share of 32%. And is therefore now strongly tipped to exceed, if not significantly exceed, physical format revenues in the coming year.
Overall total revenues from physical media accounted for £298.4 million, down 1.9% from 2015. While music download revenues fell a pretty sizable 27.3% down to £151 million.
The BPI was formed in 1973 and is a representative voice of the UK recorded music business. It promotes recorded music in the UK and worldwide and champions the rights of the music community.