UK Digital Music Market Trends

The UK has seen record levels of digital sales in 2009, with 10 trading weeks and the Christmas period still to come. 117 million singles have been sold so far, with 98.6% of these sales in digital formats.

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Year Physical (millions) Digital (millions) Total Sales

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2002 43.9 0 43.9

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2003 30.8 0 30.8

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2004 26.5 5.7 32.2

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2005 21.4 26.4 47.8

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2006 13.9 66.9 80.8

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2007 8.6 77.9 86.5

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2008 4.9 110.2 115.1

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2009 1.6 116 117.6

Not only has the singles market more than doubled in the number of units sold sine ’02, but it’s almost entirely divested itself of the physical media. This growth is not reproduced in the album market (old figures here), which in 2008 saw a shallow (compared to predictions) decline of between 3.2% and 6% depending on who you listen to, despite 68% year on year growth in digital (read people shifting over to buy digital formats rather than physical).

This is encouraging news for the music industry in the UK – despite the panic that filesharing and online piracy keeps sending through the motley ranks of the big execs, there’s not that big a downturn in sales. Music piracy is a massive phenomenon; according to the IFPI, 95% of music downloads are illegal, but is it really hurting the industry if sales are staying firm in the face of this explosion in Piracy. The BPI’s Chief Exec Geoff Taylor stated “That singles have hit these heights while there are still more than a billion illegal downloads every year in the UK is testimony to the quality of releases this year and the vibrancy of the UK download market.  Consumers are responding to the value and innovation offered by the legal services and these new figures show how the market could explode if Government acts to tackle illegal peer-to-peer filesharing.” His implication is clearly that all the pirates out there would be forced to buy their music instead of getting it free  – but I think this is something of a false premise: just because people like getting something for free, doesn’t mean they would be prepared to pay for it. I’ve been introduced to a lot of bands by people burning me CD’s or sending me tracks over the net, even way back when my teenage girlfriends used to make me mix tapes it was the same sort of piracy, but the upshot of that was that I’ve discovered more bands, been to more gigs and bought more CD’s, vinyl and downloads than I ever would have if I’d not been so freely able to share music. I strongly feel that bands should profit from people’s enjoyment and sharing of the great music they make, but it should be directly related to the cost of time effort and money involved in getting that particular piece of music to that particular person.

I would pay more for an LP than for a download because I’m getting more. Not just intangible 1’s and 0’s but a real lump of plastic and paper and design as well as the music. MP3 stores cost money to run, tech guys, ISP’s, designers and even marketing people (sadly) have to be paid, but those costs aren’t there with file sharing networks, or at least they’re not paid for by the guys in the music industry. If the site makes money, that should be shared equitably with the artists whose work they exploit, but artists should take into account that they’re not just losing download sales, they’re also gaining fans through these channels, fans that will buy tickets and albums and merchandise and write about you on their blogs and tell their friends about you, if you’re good enough, and you give them a reason to buy. *deep breath* Sorry. Rant over.

What will always be true is that supply must follow demand; if people want new ways of getting music cheaply online, the traditional market and online music stores must adapt to provide them, or fail in the competition with less legitimate routes of supply.

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