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The UK music industry’s digital shakeout is still underway, with paid downloads seemingly the latest casualty as listeners pivot to streaming services. Nonetheless, record labels appear to be finding their feet even as the ultimate shape of the streaming-era market remains a work in progress.
According to UK record industry group BPI, sales of digital albums fell almost 30% and physical sales dipped nearly 2% in 2016. Yet UK labels saw incomes reach a five-year high in 2016, with revenues passing £925 million ($1.41 billion), up from £881 million ($1.45 billion) in 2015. The results were buoyed by a 60.6% jump in streaming-derived revenues.
Revenue shares point to the ever-increasing prevalence of music streaming services. In 2012, services like Spotify accounted for just 6.2% of market revenue; by 2016, that proportion had swelled to 29.6%. This share placed it second only to physical sales, while it passed the download proportion for the first time.
Thom Yorke, lead singer for English rock band Radiohead, famously compared Spotify to “the last desperate fart of a dying corpse,” suggesting that the streaming model marked the end of the music industry as we knew it. While that colorful analogy may still carry some weight for many independent artists struggling to make streaming pay, for the major record labels, at least, the corpse is still alive and kicking.
Paid media advertising outlays worldwide will increase 7.3% in 2017 to $583.91 billion. Growth will be roughly on par with previous estimates, and spending will rise at a steady pace throughout the forecast period, driven by increased investments in digital and mobile ads.
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