New York, NY (Top40 Charts)
The BPI, the association of independent and major record labels, today reports that UK recorded music revenue1 rose by 3.8% in 2020 to reach £1.118 billion.
This is the highest total since 2006 (£1.166bn)2 and the fifth consecutive year of growth, although the rate of revenue growth slowed in 2020 (compared with the 7.3% rise in 2019), due to the effects of the pandemic.
Revenues from streaming fuelled much of the rise, growing 15.4% to £736.5 million, even as the pandemic slowed overall growth. Physical revenues decreased only marginally by 2.6% to £210.3 million – helped by the response of independent shops and specialist chains and their loyal customers who moved their purchasing online during the lockdowns. Climbing revenues from vinyl, boosted by online campaigns, increased by nearly a third (30.5%) to £86.5 million – the highest total since 1989. This helped to cushion reduced CD sales income, which, though still resilient, fell by 18.5%.
Heightened demand for music among the UK public during the lockdowns, which as reported by the BPI in January3 grew by 8.2%, under-pinned the overall growth in revenues. It also underscores the continuing appeal and success of British artists, including a new generation of UK rap, hip hop and dance talent that is harnessing the reach and immediacy of streaming to achieve tens or hundreds of millions of streams annually, and forging successful careers in music.
These revenues enable record labels’ continued investment in artists and in new music, and underline how in 2020 recorded music will have helped to support many artist incomes during the pandemic.
Geoff Taylor, Chief Executive BPI, BRIT Awards & Mercury Prize, said: “The lockdowns inevitably affected financial results in 2020 but, unlike other parts of our industry which were hit very hard, the seamless connectivity of streaming and the enduring love of vinyl meant that recorded music was relatively insulated from its worst effects, and was still able to post growth.
“The ongoing increase in paid subscription streaming fuelled labels’ ability to continue investing in artists. The safe and rapid reopening of live venues is the music community’s critical first priority, but the resilience of recorded music demonstrates the important role it plays in people’s lives even in the midst of the COVID pandemic.”
Revenues from streaming & digital
Revenue of £736.5 million (up 15.4%) from streaming, which now accounts for 80% of UK music consumption, was shaped largely by paid subscriptions to streaming services (such as Spotify, Apple, Amazon and Deezer). This rose by 14.7% to £650.3 million to reflect the 139 billion audio streams served in 2020 (up 22% on 2019). Ad-funded streaming income grew by 17.5% to £42.4 million4. Income from video streaming platforms, notably YouTube, showed some encouraging growth, rising by a quarter (24.4%) to £43.8 million – but remains just half the amount generated by vinyl.
Revenue from downloads continues to decline as substitution accelerates towards streaming. It fell by 25.1%, with downloaded albums generating just £22.4 million (down -27%), and tracks contributing £20.9 million (-23%).
Revenues from physical formats: vinyl, CD & cassette
Vinyl remains a star performer, contributing £86.5 million to revenues in 2020, up by 30.5%. Purchasing of physical formats largely shifted online in response to the lockdown challenges, with demand boosted by new campaigns such as LoveRecordStores and The Record Club livestream series in association with Bowers & Wilkins, as well as more established annual promotions including Record Store Day, National
Album Day, and HMV Vinyl Week. The growing number of direct to consumer (D2C) sales of physical products also added to the revenue figures.
According to Official Charts Company data, the best-selling vinyl titles in 2020 included, in sales order, classic recordings by Fleetwood Mac
(What’s The Story) Morning Glory?), and Amy Winehouse
(Back To Black) along with new albums by Harry Styles
(Fine Line), Kylie Minogue
(Power Up), and IDLES (Ultra Mono).
Annual income from vinyl is now closing in on CD revenues, although the latter format, which next year celebrates its 40th anniversary, still generated over £115 million (-18.5%) to underline its continuing resilience and importance to labels. Sales of other physical formats, notably cassette, which saw over 150,000 units purchased in 2020 – the highest total since 2003 – yielded £8.2 million in revenues, up 4.4% on the year.
Geoff Taylor further commented: “Vinyl’s exceptional performance despite retail lockdowns confirms its role as a long-term complement to music streaming. 2021 is likely to be the year in which revenues from LPs overtake those from CDs for the first time in well over three decades – since 1987. In addition to the immediacy and convenience of streaming, fans want to get closer to the artists they love by owning a tangible creation, and more and more of them are discovering how vinyl, or lovingly created CD box-sets, can enhance their experience of music.”
Revenues from ‘Sync’ and Performance Rights
Sync – music used in film and other soundtracks and in advertising – has been an area of revenue growth for labels in recent years, but stalled in 2020 given the profound effects of the pandemic on film production and screenings, yielding £20.9 million (-26.4%). Income from performance rights remains substantial at £105.4 million, but, again, was unsurprisingly down by over a fifth (-22.4%) on the previous 12 months as a result of the severe impact of lockdowns on nightclubs, retail and other areas of public performance.
Geoff Taylor added: “The long-term closure of nightclubs has attracted less media attention than festivals and live music, but they are also very important to music fans and to the music community culturally and socially, contributing a valued component of artist, songwriter and label income. Their safe return as a vibrant part of the Night-time Economy is something we must all work hard to achieve.”
UK artists benefit from label investment to help drive growth
A new wave of UK talent is rapidly joining more established British global stars to excite fans and drive music consumption. D-Block Europe, Aitch, AJ Tracey, Headie One, J Hus, KSI and Nines, plus artists Joel Corry, Jax Jones, Gerry Cinnamon
and Jorja Smith
are just some of the names forging successful careers thanks to the global reach of streaming, and in 2020 nearly 200 artists were streamed over 100 million times in the UK. Label investment in new music underpins much of this virtuous cycle of growth.