Digital music revenues in the United Kingdom climbed by 24.7% in 2011, but it was not enough to prevent a 3.4% decline in the overall music market, according to new figures released by labels trade body the BPI.
Total recorded music trade revenue was £795.4 million (about $1.25 billion) in 2011, down from £823.8 million ($1.3 billion) the previous year, representing the 3.4% fall. Trade income from physical formats, including albums, singles and music videos, fell 14.1%, with revenues dropping for the eighth consecutive year to £513.8 million ($805 million), from £598 million ($937 million) in 2010. Physical album sales fell 14.4% to £484.7 million ($759 million), compared to £566.4 million ($887 million) the previous year.
Digital sales did, however, enjoy a significant climb in 2011, rising 24.7% to £281.6 million ($441 million) from £225.8 million ($353 million) the year before. Digital formats now account for more than a third (35.4%) of record industry trade income in the U.K., an 8% rise on the previous year.
The growth is largely attributed to a 43.2% rise in digital album sales, which totalled £117.8 million ($184 million), up from £82.2 million ($128 million) the year previous. Revenue generated from single track downloads rose by 11.3% to £120.5 million ($188 million), compared to £108.3 million ($169 million) in 2010.
Subscription services also experienced sizeable growth in 2011, generating £24 million ($37 million) in revenue, up from £16.3 million ($25 million) in 2010 - equal to a 47.5% increase. Physical formats continue to be the dominant source of recorded music trade revenue in the U.K., accounting for 64.6% of total income.
Advertising supported, free digital services such as Spotify, YouTube and We7, earned £10.7m ($16.7 million) for U.K. record companies in 2011, down slightly from £10.8 million ($16.9 million). Income from mobile, including ringtones and ringback services, fell to £2.5 million ($3.9 million) from £3.6 million ($5.6 million), a 30.6% drop.
"It is highly encouraging for the long-term prospects of the industry that the pace of digital growth continues to accelerate," said BPI chief executive Geoff Taylor in a statement.
"British labels are supporting a wide range of innovative music services and music fans are embracing digital like never before. The record industry has continued to invest heavily in discovering and supporting outstanding British talent, which has helped sustain revenues in the face of difficult economic circumstances," Taylor went on to say.