The growing popularity of music subscription services like Spotify, Amazon and Apple is turning British music fans into "generation rent," says U.K. trade group the Entertainment Retailers Association (ERA).
In 2018, streaming subscription revenues in the U.K. climbed to just over £829 million ($1 billion), a rise of 38 percent on the previous year, reports the ERA Yearbook, published today (March 5).
In contrast, combined spending on owned formats like CDs, vinyl LPs and digital downloads dropped to £505 million ($662 million), representing 38 percent of all recorded music sales.
Of those formats, CD album sales totaled £289 million ($379 million), down from £368 million ($482 million) in 2017. Download albums fell 25 percent to £73 million ($96 million) with digital download singles sales generating just over £49 million ($64 million). Meanwhile, more than 4.3 million vinyl albums were sold in the U.K. last year, the equivalent of £91 million ($119 million) in sales.
Total music sales stood at £1.3 billion ($1.7 billion) with streaming subscriptions accounting for 62 percent all recorded music spending in the U.K.
"This is a significant moment. For the first time since the birth of the modern entertainment business in the late 1950s, more revenue is coming from payments for access rather than purchase in all three sectors – music, video and games," said ERA CEO Kim Bayley.
"New digital services have created a 'Generation Rent' for whom access models seem natural. It is nothing less than a revolution in the entertainment business," she added, calling digital services and retailers a "lifesaver for the video, games and music businesses."
Overall entertainment spending across music, video and film and gaming in the U.K. grew for a sixth consecutive year in 2018 to a record high of £7.5 billion ($9.8 billion), reports ERA.
In all three sectors, digital subscription is now ingrained as the dominant mode of purchase, piling further pressure on bricks-and-mortar entertainment retailers like HMV, which collapsed at the start of the year before being bought by Canadian record store chain Sunrise Records.
The ERA Yearbook did, however, contain a small slither of good news for record store owners and music fans who prefer to own rather than rent their favorite albums. Thanks to the surge in vinyl sales over the past decade, the number of independent record shops in the U.K. has grown to 425 -- the highest total for 12 years.