Wednesday, 19 February 2014

UK recorded sector continues to improve, but the pirates make the real money!

The BPI has announced that recorded music revenues in the UK were up 1.9% year-on-year in 2013 - that's up to £730.4 million from £716.8 million in 2012. This statistics continues a theme that has occurred in a number of markets in the last year: that the decade-plus decline of the record industry is coming to an albeit slow end.  This is largely thanks to the continued increase in digital revenues, which now account for 50% of total income. The largest increase came from streaming, with revenues in that sector up 41% in 2013 to £77 million. The bulk of this, £54.7 million, came from subscriptions, while ad-supported streaming paid out £19 million and locker services (such as Apple's iTunes Match) contributed over £3 million. Digital album sales also showed a strong increase last year, up 19.5% to £160.5m, though single track sales fell 4.4% to £121.7 million.   Revenues from physical sales, fell again last year, coming in 6.4% lower than in 2012 at £365.4 million (compared to a total of £359.2 million for digital income).

Now that's the legal market - but what of piracy I hear you ask? US consumer group the Digital Citizens Alliance, has released a report of research by MediaLink surveying 596 piracy sites and estimates that together those sites are generating about $227 million a year in advertising revenues, with the top 30 sites bringing in around $4.4 million each. And because these sites have relatively few running costs, certainly no royalty payments for either sound recordings or music rights, or payments to film companies or other broadcasters, the DCA calculates that these operations could be operating at an 80% to 94% profit margin.

In the UK, BBC Radio 1 and the Official Charts Company announced plans to include streams on services such as Spotify and Deezer in official charts.

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