In a sign of how long it has taken the music industry to recover from the deep slump caused by digital piracy in the early years of the internet, new data shows the UK’s music industry has finally managed to top its 2001 revenues – and that’s not adjusting for inflation.
UK digital entertainment and retail association ERA reported on Thursday (February 29) that recorded music revenues hit GBP £2.223 billion (USD $2.761 billion, at the average exchange rate for 2023).
That’s not the total for the 2023 calendar year; rather, it’s the cumulative total for the 12 months to the chart week that ended on Friday (February 23).
The latest number represents an 8.65% YoY increase over the same period in 2022-2023, when revenues came in at £2.046 billion. It represents a more than doubling of UK recorded music revenue since it hit a historic low of £1.020 billion in 2013.
And it marks the first time the running annual total has exceeded the record set in October, 2001, when Kylie Minogue’s Can’t Get You Out Of My Head was the chart-topping single in the UK, and the top album was STEPS’ Gold – The Greatest Hits.
(In another sign of history repeating, ERA notes that Kylie Minogue is currently enjoying a renaissance with the success of her Grammy-winning Padam Padam, and is set to be named a BRIT Awards Global Icon this coming Saturday (March 2), while STEPS’ latest album hit No.1 on the UK charts.)
The report from ERA – a trade body that represents “virtually all” digital services that stream music in the UK, as well as music, video and game retailers – marks another data point showing strong growth in the UK’s music industry over the past year.
According to data from the British Phonographic Industry, released in January, the total number of song streams in the UK jumped 12.8% YoY in 2023, to a total of 179.6 billion streams. That number is roughly double the total streams the UK clocked in 2018, coming in at 90.9 billion that year.
“This is a day many thought would never come,” ERA CEO Kim Bayley said in a statement.
“It is a red letter day for music and the artists and songwriters who soundtrack our lives. There’s still a long way to go, but these numbers show that thanks to the innovation and investment of streaming services, music is on the right track.”
“Today draws a line under 2001 and highlights the fact that music sales have more than doubled since 2013. That’s great, but after 20 years of inflation, it’s still not enough.”
Kim Bayley, ERA
Bayley called the early-2000 music revenue slump an “existential crisis” that was overcome thanks to “a new generation of music loving tech entrepreneurs [who] were able to see a way to a new model, based on subscriptions rather than sales”.
She added: “Today draws a line under 2001 and highlights the fact that music sales have more than doubled since 2013. That’s great, but after 20 years of inflation, it’s still not enough. The next milestone is to see music exceed 2001 not just in nominal terms, but in real terms too.”
According to the Bank of England’s historic inflation calculator, the £2.223 billion in recorded music revenues over the past year is equivalent to just £1.244 billion in 2001 pounds – barely more than half of today’s amount.
That means revenues would need to nearly double from today’s level to reach 2001 levels in real (i.e., inflation-adjusted) terms.
That certainly helps to explain why so many in the music industry – from Warner Music Group CEO Robert Kyncl and Kobalt Founder and Chairman Willard Ahdritz to NMPA boss David Israelite – have been arguing for years that the music business is undervalued, and have been pushing for price hikes at the streaming services, along with other innovations such as better monetization of superfans and the application of AI technologies.
“As ever the key to growth is for the music industry to embrace innovation. From the wax cylinder to the CD and indeed streaming, technology is the key to growth in music,” ERA’s Bayley said.
ERA also noted that, in its Yearbook scheduled for release next month, it will report a 7% YoY increase in combined sales of music, video and games in the UK in 2023, to £11.9 billion ($14.8 billion).Music Business Worldwide
