Football might be coming home, and the glory days are also on the way back for the music industry after growth accelerated into Q2.
Album Equivalent Sales (AES) were up 7.8% year-on-year in Q2 to 34,334,692 units, according to the BPI and Official Charts Company, as intense competition amongst the streaming giants fuelled another big rise in consumption. Audio streams rose 34.9% year-on-year to 22,559,590 Streaming Equivalent Albums (SEA), more than enough to make up for big falls in physical albums (-20.6%), digital albums (-23.5%) and track sales (-27.2%).
It also counter-acted the so-called ‘Ed Sheeran effect’. In Q1 overall growth had slowed to 4.8% as the biz struggled to compete with the singer-songwriter’s blockbuster 2017 sales for ÷ (Asylum/Atlantic).
“It’s very encouraging,” BPI chief executive Geoff Taylor told Music Week. “Ed Sheeran’s ÷ album was so huge, we would’ve seen a faster pace of growth if we weren't comparing with such a successful record with such an impact on the market last year. To be up 7.8% in Q2, particularly with that in mind, is a really good outcome. We would’ve been up 10% or more had we taken Sheeran out of the market so overall it’s growing very healthily.”
Taylor predicted that YouTube Music’s long-awaited entry into the market would ensure that streaming continues to expand exponentially, especially as Spotify and Apple Music are locked in an increasingly bitter battle for supremacy.
“A more competitive subscription streaming market is good for everyone,” said Taylor. “[Moving customers from] free to subscription has really been a Spotify game until now. The big question is how successful YouTube Music will be as a funnel. There’s a big group of free music users using YouTube that potentially might subscribe and which would add to the market.”
Vinyl also staged a revival within its revival, as growth improved on Q1, when it had slowed to a rise of just 4.7%. In Q2, a highly successful Record Store Day helped sales increase by 10.3%, good news for beleaguered physical retailers, who will be desperately hoping for some CD-friendly releases in Q3. Bricks and mortar shops are also currently suffering due to the World Cup and the heatwave.
But the strong second quarter leaves the overall business set fair for another year of strong growth. Which after (not quite) 30 years of hurt won’t stop anyone in the music biz dreaming of a new golden generation for the industry.
“Clearly, the fact that we’ve accelerated in Q2 versus Q1 is encouraging,” said Taylor. “It means that the first half figures look pretty good and there’s the potential for us to do even better. What we want to see is subscription streaming [becoming] something that most households have as their way of accessing music. If we can get to that point and millions [more] subscribers in the UK, which I think is absolutely possible, then the future looks bright.”
To read the full story behind the Q2 figures, including exclusive interviews with Taylor, Warner's Derek Allen and Universal's David Hawkes, grab yourself a copy of the current print edition of Music Week, or click here. To subscribe and never miss a vital music biz story, click here.
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