See, sometimes a decline can be a good thing: the decline of the UK’s record industry is declining. Perhaps not the headline you’d choose to have at the top of your industry’s end-of-year financial report, but things could, and have been worse. Plus, of course, decline’s in fashion these days, so the record industry’s falling revenues and profits don’t look so out of place anymore.
The UK record label trade body, the BPI, yesterday announced that the trade value of the British record industry was down 5.3% to £894 million in 2008. Retail value was down 6% to £1.308 billion, the higher decline a sign of the tightening profit margins for music retailers, instigated, of course, by the supermarkets and online CD sellers, who can afford a smaller mark up on music. So some doom and gloom, though 2007′s figures were 13% and 15% down (trade and retail respectively) compared to 2006, so, as you see, the decline is declining, and there’s your silver lining.
Other stats from the BPI report on all things 2008 include news that album sales were down 3.2% overall, though the sale of digital albums was up 65%. 109.8 million single tracks were downloaded in the UK in 2008, which is 41.6% up year on year, and downloading now accounts from the vast majority of single sales – 95.3% of the singles market in fact. 9.5% of the population bought some digital music last year, up from 5.1% in 2007.
The use of legit digital services is, as you might expect, highest among 20-29 year olds, who accounted for 43.9% of digital expenditure last year. 7.2 million MP3 players were sold in 2008, and almost a third of 16-24 year olds now listen to music at least once a week on a mobile phone.
The top level stats gave little insight into the use of licensed streaming services like Spotify, presumably a considerable growth area for the record industry, though it did reveal that BPI research suggests 10% of the aforementioned 16-24 year olds use a Spotify-style service at least once a week.
Commenting on the latest stats, BPI boss Geoff Taylor told CMU: “The rapid growth of the digital market is clear evidence that British record companies have the business models in place to deliver music to fans online. The impressive fact that one pound in every ten is earned online shows that labels are leading the way in the entertainment world in developing digital services. At the same time these figures also demonstrate that the CD is still a highly valued and loved product and that music fans appreciate the physical album. BPI’s research also shows that UK record companies invest 21% of turnover on sales in A&R expenditure – identifying and developing new musical talent – over the last three years. The rapid growth of the digital market is clear evidence that British record companies have the business models in place to deliver music to fans online”.