BPI credits the rise in revenues down to a 5.7 percent increase in music consumption across all formats, most notably streaming subscriptions, which generated £468 million ($616 million) for British labels last year, up 35 percent on 2017's total and a massive 220 percent rise on 2015.
Monies generated by subscriptions to services like Spotify, Apple Music and Deezer accounted for 54 percent of U.K. record label income in 2018, reports BPI, which notes that revenues from YouTube totaled a relatively paltry £30 million ($39 million), despite its U.K. users watching an estimated 30 billion-plus music videos during the same period.
Revenues generated by ad-supported streaming grew 26 percent to £19 million ($25 million), while download sales totaled £81 million ($107 million), a fall of around 28 percent.
Streaming now accounts for nearly two thirds (64 percent) of all music consumption in the U.K., says BPI, with the total number of individual streams rising by 34 percent year-on-year to 91 billion.
When it came to physical formats, revenues from CD sales were down by over a quarter, but still earned record labels £177 million ($233 million), equating to 20 percent of their total income. In unit terms, 32 million CDs were sold in 2018, compared to 41 million the previous year.
Vinyl sales were up by almost 4 percent, bringing in a further £57 million ($75 million) and accounting for almost 7 percent of industry income with 4.2 million vinyl LPs sold.
Overall, physical music sales dropped by 22 percent year-on-year, reflecting the struggles of Britain's leading brick-and-mortar music retailer HMV, which went into administration for the second time in six years just after Christmas, before being acquired by Canadian retailer Sunrise Records in February.
In contrast, sync revenues grew by over 11 percent to £25 million ($33 million).
As good as the year-end figures are, however, BPI points out that they are still some way off the £1.2 billion generated by the British record business in 2001. Not included in the BPI figures are revenues from U.K. music licensing company PPL, which will be announced by the London-based organization later in the year.
As previously reported, The Greatest Showman soundtrack was the year's biggest selling album in the U.K. last year, selling 1.6 million units -- well over twice the number of copies as its nearest rival, George Ezra's Staying at Tamara's, which moved 691,000 units.
Ed Sheeran's Divide was the year's third biggest-selling album (despite being first released in March 2017), followed by Now That's What I Call Music 100 and Now That's What I Call Music 99.
Commenting on the year-end figures, BPI chief executive Geoff Taylor said the U.K.'s recorded music industry "is showing consistent growth, driven by investment in new talent, innovative global marketing and offering music fans outstanding choice, convenience and value."
"The outlook for the future remains positive, but there is still a long way to go to recapture lost ground," Taylor added. He said long-term growth for the record business required the government to tackle the so-called value gap, referring to the disparity between the huge numbers of people accessing music on user generated content services like YouTube and the relatively slender sums that rights holders receive in return.
Taylor also said that the British authorities needed to "promote investment, ensure online platforms take responsible action to reduce infringement, and secure the future talent pipeline by giving state school pupils the opportunity to discover and develop their talent."