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Mart!n
post Apr 22 2021, 05:17 PM
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QUOTE
In our exclusive online Q1 analysis, Music Week crunches the numbers on the quarter that marked the first year of the pandemic.

Here, commercial execs from Universal Music, Sony Music and Warner Music analyse the trends and look ahead to the prospects for physical music and streaming behaviour in 2021…

TALENT

Twelve months on from the pandemic, the UK recorded music market has largely weathered the storm.

While the live sector is still waiting to see if there’s a festival season, it feels like the summer is already getting started with Q1 hits from Riton x Nightcrawlers, Tiesto, Tom Grennan and Joel Corry, Raye & David Guetta still making an impression on the charts.

Execs will be hoping that their big Q1 albums stick around too.

Following a Grammys win, Dua Lipa emerged triumphant in Q1 with Future Nostalgia (Warner Records) as the quarter’s biggest seller (68,296 sales). Following its release as the UK went into lockdown in March 2020, the album first came out on top in Q2 2020 and now has sales to date of 346,528, according to the Official Charts Company.

“One of the biggest challenges facing both label and artist is how to ensure your album has staying power,” says Derek Allen, SVP, commercial at Warner Music. “So many projects in the current market are exhausted inside three months. One of the primary ambitions for Future Nostalgia was to establish the album in the market for a year and beyond. I think the label have achieved that.

“With the help of strategically timed repacks and shrewd marketing, they’ve delivered an album that has been Top 10 for 35 of its 53-week life span, and has been Top 5 for the last six weeks! Also, three BRIT nominations, not to mention a Grammy win, mean that we can carry the momentum deep into 2021.”

Longevity is the key to the majority of titles in the Top 10 for Q1, including Harry Styles’ late 2019 release Fine Line (Columbia) at No.3 (61,419 sales), Pop Smoke’s posthumous 2020 No.1 debut Shoot For The Stars Aim For the Moon (Polydor) at No.4 (59,536 sales) and Lewis Capaldi’s Divinely Uninspired To A Hellish Extent (EMI) at No.6 (55,388) and now on its 100th chart week. Catalogue from Queen and Fleetwood Mac also has staying power in the streaming era.

Despite the market shift, it’s not just about DSPs determining OCC rankings. The second biggest album of Q1 was Foo Fighters’ Medicine At Midnight (Columbia), which moved 66,231 units (including 31,617 physical sales in week one).

“The band are endlessly creative and active so that will keep this album active throughout 2021,” says Charles Wood, Sony Music UK’s VP of market planning & media. “Medicine At Midnight is a record that has clearly reacted well with the Foos’ fanbase, so we want to keep broadening out the reach of this record as far as we can. Last week saw the announcement of the What Drives Us documentary film, due out on Amazon Prime at the end of the month.”

The album’s vinyl performance was particularly impressive.

“The swing in the market towards vinyl is illustrated by the album as it sold 10,500 on vinyl in its first week – double the amount the previous album Concrete And Gold sold – even though Concrete and Gold sold more in total,” notes Wood, who calculates that 5,000 Foo Fighters fans must have invested in turntables recently.

Music Week cover star Lana Del Rey had an even stronger week one vinyl performance with Chemtrails Over The Country Club (Polydor), the fastest-selling vinyl LP of the century by a female artist (16,705 copies in seven days).

Universal Music labels claimed half of the Top 10 albums and singles in the first quarter, including the No.1 single Drivers License (Geffen/Polydor) by Olivia Rodrigo (707,494 sales) and second place sea shanty Wellerman by Nathan Evans, 220 Kid & Billen Ted (396,206).

“As ever, our strong performance is testament first and foremost to brilliant music and the remarkable levels of creativity from our artists and their teams who are constantly looking at new ways to connect with fans established and new,” says David Hawkes, MD, Commercial Division, Universal Music UK. “So whether that’s signing and breaking new talent or ensuring our countless heritage acts continue to be at the front and centre of audience minds, the innovation from our labels and teams in order to navigate this completely new landscape has been incredible.”

Universal can also celebrate the return of the UK breakthrough with a No.10 finish in Q1 for Celeste’s Not Your Muse (45,393 sales). Like many debut campaigns, Covid pushed the release back to 2021 (KSI was the only UK debut album breakthrough of 2020). The BRIT Rising Star winner secured the first No.1 by a UK female artist since Jess Glynne in 2015.

“Polydor’s success with Celeste and her extraordinary chart-topping debut album has been a joy to see,” says Hawkes. “The whole campaign from promotions to creative has been beautifully implemented and it was also no surprise to see Celeste nominated for an Oscar and three BRITs… A real success story and, if you haven’t seen her performance on The Tonight Show Starring Jimmy Fallon, it’s an absolute must watch.”



Celeste’s fellow BRIT nominee Arlo Parks, who charted at No.3 in the week that Not Your Muse reached the summit, is also a Q1 UK breakthrough act with her debut Collapsed In Sunbeams (Transgressive/PIAS) at No.55.

“Arlo Parks and Beatnik Creative [management]prepared the groundwork for her breakthrough prior to signing to Transgressive/PIAS,” says PIAS MD Jason Rackham. “She had built up her profile at grassroots level, so that once the label became involved the foundations had been laid. It was then the role of Transgressive and PIAS to develop her audience whilst protecting her message and credibility.

“Campaign momentum will be maintained via a continued focus on premium content being delivered across the campaign and aggressive marketing around future accolades to come, plus the point of celebration when Arlo gets to take to the road internationally to play these special songs to her fans.”

The third breakthrough of the quarter was the streaming-powered Wild West mixtape by rising UK rapper Central Cee, which amassed 26,726 sales. The self-releasing artist (in partnership with Warner Music’s ADA) also secured two singles in the overall chart for Q1 – Loading (No.36, 158,050) and Commitment Issues (No.43, 140,513).

“While the week one sales were impressive – one of the highest first week rap numbers for some time – the ongoing streaming performance is even more exciting with the tape having spent a month now in the UK Top 10 albums chart,” says newly-promoted ADA UK GM Brooke Salisbury. “Rappers are usually the best marketers of their own music and this is very true for Cench. His socials are growing crazy fast and the TikTok sound usages are proving very powerful in fuelling ongoing discovery. There’s a few singles in play, all serving different audiences – Commitment Issues is Top 50 airplay while 6 For 6 is a hit with the rap scene.”

“Cench is a star, a true talent who we’d been looking to work with for a while,” adds ADA UK MD Howard Corner. “At ADA we have a very particular and proven approach to artist campaigns – dynamic, engaged, passionate and creative – so when you combine those elements into one very connected and focused partnership, you’re able to achieve amazing things.”

MARKET TRENDS

While the overall market didn’t quite manage amazing things in Q1, it was a solid performance during another period of national lockdown.

According to BPI stats, all music consumption (AES) in the first quarter of the year was up 2.3% year-on-year to 37,643,312. That’s down on the 7.7% year-on-year growth in the first three months of 2020 (the pandemic arrived late on in that quarter so there was little impact). Two years ago, Q1 growth was at 8.2%.

“Undoubtedly, Covid has influenced performance but we’re confident that our strong forthcoming schedule will more than compensate for the pandemic’s impact,” says Derek Allen.

Physical album sales were down 21.1% year-on-year to below four million units in Q1 (3,950,017). But that decline was actually slower than in the first quarter of 2020 before the pandemic hit retail.

The prospects for a continuing vinyl boom are also promising: the format was up by an incredible 16.1% in Q1 to pass a million units (1,080,653). Remember, Vinyl was actually down slightly in the first three months of 2020 and there were fears the market had peaked.

In contrast, CD sales slumped by 29.9% in Q1 to 2,835,511 units.

“Ironically the success story of the pandemic is the oldest (and analogue) format – vinyl,” says Sony’s Charles Wood. “Last year people spent more time at home than ever before and invested in items for the home like turntables and then actually had time to sit down and listen.”

“The return of retail should help soften the decline in CD volumes as consumers will be able to walk up and browse and make impulse purchases,” he adds.

“It’s fair to say the mass migration to online has enabled much of the sector to navigate one of the most challenging periods in retail history,” says Warner’s Derek Allen. “I can see no reason why a return to traditional retail practices, coupled with a newly discovered talent for online exploitation, wouldn’t bode well for the continued growth of vinyl.”

“The early signs are positive and it seems levels of footfall are exceeding expectations,” adds Universal’s David Hawkes. “The opening up of the High Street is very welcome and we hope business there will complement what has been an incredible performance by our online stores. We also have to give huge credit to the indie retailers who have navigated the lockdowns brilliantly – there are endless examples of stores whose loyal customer bases have helped them in pivoting to online business without really skipping a beat. When it comes to vinyl, the market has definitely broadened for the format. Vinyl is the ultimate demonstration of fandom.”

Cassettes are also showing their growing value as fan objects – sales were up 38.8% in Q1 from a modest base and reached 26,061 units.



But it’s streaming that’s keeping the music market growing: Streaming Equivalent Albums (SEA) were up by 7.6% year-on-year in Q1 to 31,799,282 units. While that was down on the strong double-digit quarterly growth of Q1 last year, this year has suffered in comparison because of chart weeks in 2020 – a 53-week year that actually started on December 27, 2019 when Christmas streams were still accumulating rapidly.

As a result, AES in Q1 2021 wasn’t in year-to-date growth until week 12 near the end of the quarter. But streaming is now advancing: audio streams were up 16.1% year-on-year in week 12 and 20% in week 13. So it bodes well for stronger overall growth in Q2, especially with the BRITs taking place in May rather than February.

And, as the streaming market matures, churn rates, average revenue per user and other measurements are just as important to track as the headline numbers.

“It’s probably better to look at the BPI value numbers to assess the health of the streaming market – the number of streams in a year is less closely correlated to the value of the market, than album sale volumes are to the value of the albums market,” explains Wood.

“In 2020 the streaming market was up a very healthy 15%, which is pretty much what we were forecasting pre-Covid. We are expecting the streaming market to continue to grow over the next few years as we are a way away from saturation. This growth won’t be at the same rates as we have seen in previous years because it’s from a much higher base, but it will have the effect of maintaining the great run we are on.”

“There’s no doubt that changes in listening habits as a result of the pandemic have led to an upturn in streaming,” adds Hawkes. “The BPI published some figures earlier this month which show over a quarter of people surveyed had increased their music listening compared to pre-lockdown. The good news is that everything we are seeing suggests that the new listeners who have embraced streaming during this period are here to stay.”

“There’s also been quite a lot written about the important role music has played during this period when it comes to mental health and wellbeing. For example, the same study from the BPI showed that half of those surveyed said they listened to music to boost spirits and I think that’s something most of us can relate to, certainly over the past year!”

MARKET SHARES

In the first quarter of 2021, new names make an appearance in the market shares. Virgin Music (formerly Caroline) and 0207 Def Jam both show up in the record company run-down for the first time.

At the corporate group level, based on the Official Charts Company’s AES All Albums metric, Universal Music UK was down slightly year-on-year although its market share was still a robust 35.6% (36.8% in Q1 2020).

“Bricks and mortar retail has obviously been closed and the lack of footfall will of course have had an impact, but the well documented trend of fans increasingly shopping for music online has certainly had a positive impact and has helped us to grow our D2C business over the past 12 months,” says David Hawkes. “With retail opening up, the early signs are good…”

EMI, Polydor and Island occupied second, third and fourth place among the labels for AES All Albums.

Based on Track Streams, Universal was up 4% year-on-year and registered a 36% market share (37.1% in Q1 2020).

Sony Music UK had a good quarter: the major’s AES All Albums total in Q1 was up 4% year-on-year and ahead of the market. Its market share increased from 20.9% in Q1 2020 to 21.6% in the first three months of this year.

RCA was the No.1 label in the quarter based on AES All Music (10.8% share).

For Track Streams, Sony Music UK added. 0.4 points to its market share (21.8%) compared to a year ago as streams increased by 9% year-on-year (compared to 8% for the overall market.

“We’ve been very lucky to have adapted to this new world very well over the past year,” says Wood. “And this has been reflected in our Q1 shares – we’re up in every measure – which is a testament to our artists and our label teams and the work they’ve done to adapt.”

Despite the success of Dua Lipa, Warner Music UK was down by a point for its Q1 2021 AES All Music market share (15.6%) following a 6% year-on-year decline. But the major’s Track Streams were up 2% year-on-year for a 16.3% share (17.2% in Q1 2020).

Overall, streaming gains across the market were more modest in the first quarter, although that’s to be expected as the base expands over time.

So what’s the outlook for the rest of the year?

“It does seem that streaming growth has been largely untroubled by the pandemic's impact,” suggests Allen. “Indeed, it’s safe to say that the UK's blossoming love affair with voice hardware has driven streaming consumption from the work commute right into the heart of the home. It remains to be seen whether this trend reverts back to pre-Covid behaviour [following] lockdown.”

“What’s interesting with Covid impact isn’t the size of the market, but how the nature of things has changed – and that’s what we know will have a lasting impact – there’s no such thing as returning to a Pre-Covid world, the pandemic has fundamentally shifted how we live our lives,” adds Wood. “Covid meant a rapid global shift in behaviour: people adopted new tech, adapted to new schedules and they adjusted and changed almost every aspect of their everyday lives. We couldn’t continue to work as if everything was the same – because the world wasn’t the same, we had to adapt.”

As we emerge from the pandemic, and return to old habits – from the office commute to the summer getaway – the industry will be closely watching to see if those new streaming routines have become embedded in consumer behaviour.


Source: MW
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Lo-Fi Version Time is now: 18th June 2021 - 11:47 PM