The latest figures from BPI, which represents independent record labels and major record companies across the UK, initially shows the healthy financial state of the UK music industry.
With another consecutive year of growth, it means the music industry’s finances have increased some 36% from the £968.6 million reported in 2017.
However, the figures aren’t all that rosy when accounting for the overall gloomy economic forecast that’s beset the UK recently.
Although the £1.32 billion reported today represents the highest nominal annual figure on record, when adjusted for inflation, the figures falls around £443 million below the £1.76 billion where the industry should have been in real terms since 2006.
2006 marked the first year when revenue derived from public performance and ‘sync’ (synchronisation) – music licensed for use in film & TV, games soundtracks and advertising – were also incorporated into the annual figures.
Last year’s growth in figures was again majorly driven by a rise in streaming revenues, which rose 6.3% year-on-year to £885 million and which now account for 67.2% of industry revenue – an increase from its 66.2% share the year before.
The news comes in the same week that Spotify, which reportedly accounts for more than 20% of global recorded music revenue, revealed at its Stream On conference that it’s surpassed 500 million global users, and says it’s paid-out some £33.5 billion ($40 billion) in total to music rights-holders.
A negative trend has continued for the UK music industry, though, with overall revenue from the consumption of music on physical formats having fallen by 10.5% to £215.7 million over the last 12 months.
Vinyl now accounts for more than half the revenue (55%) derived from the sale of music on physical formats – correlating with figures put out by the Entertainment Retailers Association (ERA) earlier this year, which reported that vinyl generated more revenue than CD for the first time since 1987.
Whilst most of these figures represent yet another positive year for the UK music industry, the few hitches means Sophie Jones, BPI Chief Strategy Officer and Interim CEO, isn’t entirely glowing about them
In response to the latest figures, Jones said: “The hard work and creativity of UK artists and labels meant that 2022 was another great year for British music, but we must guard against any complacency in the face of growing challenges and keep promoting and protecting the value of music.
“That’s why labels continue to innovate and invest in new talent and areas to connect more artists and fans while driving additional revenues.
“The UK environment has always enabled recorded music to thrive, something we must safeguard, but now we need the music community to unite and create the impetus for further growth so that we can build on an already strong foundation to futureproof the success of British music in an increasingly competitive global music market.”