Renters vs Buyers: Habits of UK music consumers are becoming more Aussie
UK entertainment consumers are following the trend of their Australian counterparts by becoming “renters” rather than “buyers” as digital grows.
In Australia, streaming grew 55% through the 2017 calendar year and a further 14.8% between January and June 2018.
ARIA’s half-year figures show a 31.9% jump in ad-supporting streaming revenue to $12.7 million, while subscription sales are up 35.1% to $105 million.
Sales from digital tracks and albums were down 31.8% and 36% respectively
Similarly, the UK became a majority ‘rental’ market for the first time in 2018, according to figures released by the Entertainment Retailers Association (ERA).
Music followed video and games, with revenues for paid-for music subscription services up 38% in 2018 to £829.1 million (A$1.543 billion).
As a result, subscription now accounts for 62% of total recorded music revenues.
Ownership formats like CDs, vinyl LPs and downloads now only account for 38% of revenues.
Key to the growth was streaming retailers like Spotify, YouTube and Deezer continuing to convert their free-tier users into paying subscribers, while Amazon introduced many more of its customers to its music streaming service – not least through the success of the Amazon Echo smart speaker.
This Subscription-Video-On-Demand (SVOD) sector grew by 31% in 2018 and is now responsible for over 55% of total video revenues.
Now music has joined the party to become a majority rental market.
ERA CEO Kim Bayley declared this is a “significant moment”.
“For the first time since the birth of the modern entertainment business in the late 1950s, more revenue is coming from payments for access rather than purchase in all three sectors – music, video and games,” says Bayley.
“New digital services have created a ‘Generation Rent’ for whom access models seem natural. It is nothing less than a revolution in the entertainment business.”
ERA figures show:
Spend on access was £829.1 ($1.543 billion), spend on ownership was £505.8 ($941.3 milion), with a total of £1, 334.9 ($2.48 billion).
Percentage of rental was 62.1% and ownership was 37.9%
Spend on access was £1,469.2 ($2.73 billion), spend on ownership was £868.8 ($1.61 billion)with a total of £2,338.0 ($4.35 billion).
Percentage of rental was 62.8% and ownership was 37.2%
Spend on access was £2251.9 ($4.19 billion) spend on ownership was £1,612.0 $3 billion) with a total of £3,863.9 ($7.19 billion).
Percentage of rental was 58.3% and ownership was 41.7%.