Music Week Year End Industry Summary, Streaming reaches a new peak. 12%
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Jan 3 2015, 09:55 AM
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Music Week item:
"UK streaming value rises 65% to offset album and singles slump in 2014
by Tom Pakinkis
2 days ago
The UK saw further significant falls in album and single sales in 2014, but a steep rise in streaming saw the market remain more or less flat overall.
According to year-end Official Charts Company stats released by the BPI, album sales generated £713m in 2014 compared to £773m in 2013 – a decline of 7.8%.
Meanwhile, singles revenue went from £168m in 2013 to £142m in 2014, representing a 15.3% slip.
The value of streaming soared in 2014, however, with revenues of £175m easily surpassing 2013’s £106m – a 65.1% increase.
The overall balance meant that music’s total retail value stood at 1.03 billion in 2014, marginally down from 1.05 billion in 2013 (-1.6%).
The number of audio streams doubled in 2014 as nearly 15 billion (14.8bn) songs were streamed from digital services such as Spotify, Deezer and Google Play compared with 7.5 billion streams in 2013. This meant that streaming accounted for 12.6% of all the music consumed in the UK – up from 6.2% in 2013.
Ed Sheeran was the most streamed artist of the year, followed by Sam Smith (pictured).
Digital album unit sales slipped 9.0% from 32.6m in 2013 to 29.7m in 2014. Single/track unit sales (more than 99% of which are digital downloads) went from 182m in 2013 to 156m in 2014 – representing a 14.2% decline. The format’s total share of the market slipped from 15.2% to 13.3% year-on-year.
The annual market share of physical albums slipped below the 50% mark in 2014. While unit sales of 61.4m saw the format claim 51.3% of the total market in 2013, a 6.9% dip in sales to 57.2m in 2014 meant that its overall slice was reduced to 48.8%.
Within the physical albums market, CD unit sales continued to slip year-on-year from 60.6m in 2013 to 55.7m in 2014 (-7.9%) while vinyl continued to rise – the format was up 65.1% YoY as it breached the million sales barrier, finishing 2014 on 1.289m units.
The biggest selling album of the year was Ed Sheeran’s x, which has sold 1.7m (1,689,124) copies in the UK since its release in June 2014, the largest total for an artist album release since Adele’s 21 in 2011. Nearly half a million of these sales (425,619) came in the last two weeks of the chart year, driven mainly by Christmas gifting.
British acts claimed 100% the 2014 Top 10 artist albums list with Sam Smith, George Ezra, Paolo Nutini, Coldplay, Paloma Faith, One Direction, Olly Murs, Pink Floyd and Take That joining Sheeran in a dominant home-grown display. Click here for full end of year rankings and analysis.
“The remarkable success of British artists in 2014 is exciting news for the future," said BPI and BRIT Awards chief executive Geoff Taylor. "Our record labels are backing home-grown talent like Ed Sheeran, Sam Smith and George Ezra, who in turn are catching fire around the world.
“With major new premium services from Apple and YouTube set to boost subscription streaming even further in2015, we believe the UK’s world-leading music industry is strongly positioned for future expansion.”
Tony Wadsworth CBE, the former BPI chairman, who stood down from the position at the end of 2014 after seven years in the role, said: “The UK recorded music industry invests in a truly global business, as labels continue to find, develop, support and succeed with world class artists making world-class music. Record labels are also at the forefront of the transformation of the creative economy, and our businesses are starting to see sustained growth in a future which benefits creators and consumers alike.”
Kevin Brown, Spotify head of label relations, Europe, said: “2014 has been a year in which streaming has truly become mainstream in the UK, as proven by the billions of streams by music fans on Spotify in the UK this year. Wonderful British artists such as Ed Sheeran have been responsible for both a huge year of music consumption in the UK, and also generated massive quantities of streams all over the world.
“We expect streaming to go from strength to strength in 2015, as more music fans discover how easy it is to enjoy a whole world of music on demand, and also as we support a new swathe of exciting young artists break through and build new audiences on Spotify in the months ahead.”
Christian Harris, Deezer UK & Ireland country manager, said: “With streaming numbers doubling in 2014 to help take digital to just over half of all music consumption, this year really has shown that Brits are not only leading in the way in the charts, but are also playing their part building the new audio economy.
“From Deezer's perspective we’ve seen a big uptake in ‘lean back’ and discovery features like Flow, our unique personalised music feed. This tells us not only that our audience trust us to accurately recommend new music but that consumer taste is only growing stronger, and with labels, artists and management realising the potential of these platforms 2015 could not look brighter.”
Album Equivalent Sales (AES) comprise Track Equivalent Albums (TEA) and Streaming Equivalent Albums (SEA), along with digital and physical album sales. Track Equivalent Albums takes all singles (over 99 per cent of which are digital downloads) and, using a ratio of 10 to 1, converts these into an equivalent number of albums for a given period (in this case one year). By the same token, Streaming Equivalent Albums represent the total number of streams divided by 100 (the ratio used by The Official Charts Company to convert streams into a digital track equivalent when collating the Official Singles chart) and then again by 10 to replicate the approximate average number of tracks on an album."
So, an industry which comprises 12% of the value of the total market is dictating what the rest of the industry needs to do, and the ratio of weighting for the lower end of the chart does not in any way reflect the income generated overall.
In terms of singles sales: 20 million annual is it's lowest point, 188 million it's peak, and most years have been under 100 million since the single was invented.
Crisis? What crisis? The only crisis is the music industry is panicking about it's profits. The single revival has hit album sales and albums are where the money is, so they are jumping on streaming as a nice little earner for them (not necessarily for the artists, mind you).
Just a thought to discuss...?
This post has been edited by popchartfreak: Jan 3 2015, 09:56 AM
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