BPI report: UK acts make more from vinyl than YouTube

The British Phonographic Industry (BPI)’s Music Market Review 2016 yearbook revealed that UK artists had a 17.1% share of the global market in 2015.

This was lead by Adele (whose 25 album was the biggest selling record in the world with 17.4 million copies including 2.5 million in the UK), as well as Coldplay, Ed Sheeran, One Direction and Sam Smith

In quick stats, the review showed that the UK recorded music market is now worth £688 million (A$$1.38 billion), a fall of 1% on 2014, with CD sales down 3.9% and downloads slipped 13.5%. Audio streaming was another story, up 82% in consumption to 26.6 billion plays in the UK and up 69% in revenue.

But the BPI, with some anger, pulled out two sets of statistics which it said could ultimately endanger investment in new UK acts when its major acts were in demand. Vinyl sales were making more money for its acts than music video streaming sales, which were exploding in consumer uptake.

It noted that vinyl albums, rising for its eighth consecutive year to its highest in 21 years, sold 2.1 million units last year, and generated £25.1 million ($50.4 million) for labels.

But music video streaming rose by 88% to 26.9 billion – and yet ad funded platforms as YouTube contributed only a “meagre” £24.4 million ($49 million) to music industry coffers, a rise of 0.4%. That represents just 17% of revenues for artists and labels – and that was because their royalty rates were much lower than subscription audio streaming services such as Spotify and Deezer, which contributed a combined £146.1 million ($293.6 million).

BPI CEO Geoff Taylor observed, “It is hugely encouraging that demand for British music is so strong at home and abroad thanks to our brilliant artists and the continual innovation and investment of our record labels.

“Yet the fact that sales revenues dipped in a record year for British music shows clearly that something is fundamentally broken in the music market, so that artists and the labels that invest in them no longer benefit fairly from growing demand.”

He added: “Instead, dominant tech platforms like YouTube are able to abuse liability protections as royalty havens, dictating terms so they can grab the value from music for themselves, at the expense of artists.

“The long-term consequences of this will be serious, reducing investment in new music, making it difficult for most artists to earn a living, and undermining the growth of more innovative services like Spotify and Apple Music that pay more fairly for the music they use.

“In 2015, UK fans streamed almost twice as many music videos as the year before; tens of billions more views. Yet artists and labels did not benefit from the increased demand for what they created. This is wrong. Music is precious – it’s not a commodity to be strip-mined for big data. And as we’ve seen time and again in the digital market, where music goes first, the rest of the content sector will follow. This problem requires urgent action by the EU, and our Government needs to take the lead in making sure it is tackled”.

YouTube for its part argued that it has already paid US$3 billion (A$4.1 billion) to the music industry, in addition to investing time and money in offering studio space and advice for creators on how to make more engaging content. It says that in today’s music industry, content engagement and global reach are key – and it can provide that to artists more than labels.

YouTube issued a statement: “For years, the music industry lost millions of dollars as piracy rates soared. Thanks to our rights management system, Content ID, rightsholders have complete control of their music on YouTube and can easily decide whether to have content taken down, or profit from it.

“Today, revenue from Content ID represents 50% of what we pay out annually. In fact, ad-supported music streaming enables revenue from an audience that has never before paid for music. As more advertising money comes online, this will grow to match consumption. Comparisons to other audio-only, subscription music services are apples to oranges.”