Business News Labels & Publishers Retail

UK music streaming revenues topped £1 billion in 2019

By | Published on Friday 3 January 2020

Entertainment Retailers Association

The retail value of recorded music in the UK was up 7.1% to £1.4 billion in 2019, according to initial year-end figures published this morning by the Entertainment Retailers Association.

The ongoing streaming boom was behind all that growth, of course, with the streaming services together generating over a billion in annual UK revenues for the first time last year. A 23.5% increase in the monies made by the streaming services helped to compensate for a 17% decline in physical product revenues and another 26.8% slide in download sales.

ERA points out that UK revenues for the music streaming sector have increased four-fold in the last five years, and a massive 3083.7% over the last decade. Which is a nice big number, isn’t it?

Though growth is obviously slowing as the market matures, presenting new challenges for the record industry and its digital and retail partners, including: how to get more money out of existing subscribers; how to satisfy much more casual music consumers; and how to get the most out of micro-licensing user-generated content platforms.

Commenting on the 2019 figures, ERA boss Kim Bayley noted: “As more and more people sign up to streaming services, it obviously becomes a challenge to maintain the same rate of growth, but the fact is UK music fans spent £190 million more on subscription streaming services in 2019 than they did the year before – that’s more than twice the value of the entire vinyl market”.

Which puts the vinyl revival into perspective, I suppose, though that remains the bit of the physical product market that is still in growth. In 2019 vinyl sales grew 6.4% to £97.1 million.

Entertainment retail at large – including video and gaming – saw revenues rise 2.4% to £7.8 billion. Digital platforms were also behind that wider sector growth, especially in video where digital income was up 21.5% to £2.1 billion, as more and more people sign up to video-on-demand services like those provided by Netflix and Amazon.

In the video domain, of course, new services are now entering the market offering complementary content, which in theory could fuel further growth in the years ahead. Though it remains to be seen how many different services the average consumer will subscribe to.

Gaming, the biggest strand of entertainment retail, had a tricky 2019, with overall revenues down 3.4%, resulting in slower growth figures for the entertainment retail sector at large.

Digital saw modest growth in gaming, but physical sales were down 21.7%, partly – ERA says – because the sector is at the end of a console cycle, with disc sales slowing in anticipation of the launch of new PlayStation and Xbox consoles in 2020.

Commenting on the sector at large, Bayley continued: “The rise of digital entertainment services has created the biggest revolution in UK leisure habits in history, enabling people to access the music, video and games they love wherever and whenever they want, and transforming the fortunes of record labels, filmmakers and games developers”.

“The fact that in 2019 over 80% of entertainment spending was on digital services shows the scale of that revolution”, she added.