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2016: A GOOD YEAR FOR U.K. MUSIC RETAIL

The U.K.’s music market grew 4.6% last year to £1.108b, recording the highest uptick since the turn of the century. Seventy two percent of cash spent on music was done so online, with streaming subscriptions pulling in £418.5m, up 65% year on year, and counting for 38% of total retail spend on music in Blighty.

The stats come courtesy of the Entertainment Retailers Association’s Yearbook, which holds a wealth of insight into the current state of the British music market.

Of the £1.108b spend, digital content took a 57.1% share at £633m—up 15.8% year on year—with 66% (£418.5m) coming from monthly streaming subscriptions. Spend on monthly subscription services like Spotify and Apple Music now account for two thirds of total digital spend.

Digital downloads were worth barely half the value of that in 2016 at £214.6m (19%) across singles and albums, down 53.6% on 2015. Physical sales across albums and singles declined 7% to £473m, representing 43% of music’s total retail value. Last year, the Official Charts Company recorded 44.9b audio-only streams—a 67.5% rise on 2015.

The physical/digital split of the £600m album sales (55% of total sales) in 2016 was weighted heavily in favour of the former at 79% (£473m) vs. 21% (£128m). Last year wasn’t a healthy one for blockbuster releases and the format declined 12.4% overall. Digital album bundles were down 27% year on year, while physical dropped 7%.

The price of an album has risen for the second year in a row with the average unit costing £8.22 in 2016, up 4.1%. The inflation is said to be down to the ongoing vinyl revival, with the average LP retailing for £19.40. Indeed, vinyl sales were up 54.4% to £65.6m (a 6% marketshare). Despite a wealth of cut price promos, the price of a digital album is up for the second year in a row to £7.07, rising 3.5%.

Of the total £6.3b folks in Britain spent on entertainment, spanning music, video and games, 80% was done online in 2016, with expenditure on subscription services like Spotify and Netflix exceeding CDs and downloads for the first time across the 53-week trading year. The £6.3b total is up from £6.1b in 2015, and marks four consecutive years of growth in consumer spend.

Music took an 18% share of that £6.3b figure, while video is up 2.2% to £2.252.2b (35.6%) and the videogames market rises 2.9% to £2.957b.

Only four artist albums released in 2016 made the year-end Top 10 biggest sellers—Michael Ball & Alfie Boe’s Together, Elvis Presley's The Wonder of YouLittle Mix’s Glory Days and David Bowie’s Blackstar—while five of the Top 10 tracks in the 2016 Official Singles Chart were released in 2015—a dynamic unheard of before the advent of streaming. 

 

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