Record sales in the U.K. climbed to a five year high in 2016, driven by sustained growth in streaming and the continued resilience of physical formats.
Total sales for the year were £926 million ($1.2 billion), up 5.1 percent on 2015, according to labels trade body BPI. In line with other leading markets, uptake in subscriptions accounted for much of the growth, with streaming revenues up 61 percent year-on-year.
Streaming now accounts for 30 percent of all label sales, while physical still makes up 32 percent of labels' income. BPI predicts that streaming will "undoubtedly" overtake CD sales to become the leading source of revenue for British record companies in 2017.
"It's encouraging to see revenues rise significantly, as more and more consumers enjoy the benefits of subscribing to a premium streaming service or rediscover the joys of vinyl," commented BPI chief executive Geoff Taylor. He went on to say that while Britain's "world-leading" music industry has the potential for sustained future growth, it can only be realized with strong support from the government as it forges a path in post-Brexit Europe.
"What does this mean? It means making sure that U.K. artists can tour freely in EU markets and that U.K. businesses can access the best talent. It means taking firm action against illegal websites that deny artists a living, and it means making clear in U.K. law that huge online platforms must pay fair royalties for the music they use," Taylor went on to say, outlining his case for British artists' continued global success.
Closer to home, BPI's 2016 figures cement the growing importance of streaming to the industry with subscriptions to services like Spotify, Amazon and Apple making up over 87 percent of the £274 million ($343 million) that labels took home from streaming. Income from ad-supported tiers of audio streaming services represents just 3.6 percent ($11 million) with video streaming accounting for over 9 percent ($25 million).
For the four weeks ending Dec. 18, consumer research company Kantar reports that 11 percent of the U.K. adult population used a paid-for service, up from 9 percent in the corresponding period in 2015. The inevitable flipside to the spike in streaming subscriptions is that annual download sales plummeted by over 27 percent to £151 million ($189 million) across single track and album downloads.
Despite streaming's growing popularity to British music lovers, physical continues to prove a surprisingly resilient format and — years after its death knell was prematurely predicted — still remains the largest stream for labels, with CD and vinyl sales falling by just under 2 percent in 2016 to total £284 million ($355 million). Within that, vinyl now accounts for 15 percent of physical album turnover and 4.5 percent of total label revenues.
Music DVD sales were also buoyant despite increased competition from on demand services like Netflix with two of the year's biggest music releases, The Beatles' Eight Days A Week and the Oasis documentary Supersonic, selling over 350,000 copies combined.
Royalties collected by U.K. society PPL from the broadcast and public performance of recorded music generated £174 million ($217 million), up 1.8 percent on 2015. Sync drew in a further £22 million ($27 million), up just under 1 percent on the previous year.