Record labels are on track to make more money this year from the sale of vinyl records than the once-mighty CD for the first time since the 1980s, as pandemic music buying habits accelerate the revival of the classic LP.
UK record labels enjoyed a 30% boost in income from the sale of vinyl records last year to £86.5m, the highest total since 1989, as fans unable to attend live music because of pandemic restrictions spent their spare cash on building up their record collections. The number of vinyl records sold, led by classics such as Fleetwood Mac’s Rumours alongside new releases from Harry Styles and Kylie Minogue, also hit a three-decade high of 4.8m last year.
The pandemic has not halted the inexorable decline of the compact disc. While the format was convenient, it was never a favourite with collectors and sales have continued to fall in the face of the streaming revolution, with record labels reporting an 18.5% slump in income last year to £115m.
The number of CDs sold has plunged by almost a third to 16m in 2020. As recently as 2010 the format was worth £563m to UK record labels, while income from vinyl was just £3.5m.
Music fans are choosing to indulge in albums, prized for their cover art and sleeve notes, as a physical alternative to listening to streaming, the BPI said. Buying shifted to online channels as lockdown restrictions shut record stores for months on end.
“Vinyl’s exceptional performance despite retail lockdowns confirms its role as a long-term complement to music streaming,” said Geoff Taylor, the chief executive of the BPI. “2021 is likely to be the year in which revenues from LPs overtake those from CDs for the first time in well over three decades – since 1987. In addition to the immediacy and convenience of streaming, fans want to get closer to the artists they love by owning a tangible creation.”
While the battle of the traditional music formats plays out, it is streaming that continues to be top of the pops for consumers and fill the coffers of record labels. In January, the BPI revealed that the amount of music streamed last year rose by 22% to 139bn audio streams, up from 114bn in 2019.
For UK record labels that translated to a 15.5% increase in streaming income to £736m last year, driven by a rise in the cut of revenue that labels receive from Spotify, Amazon Music and Apple Music.
Income from all digital channels, including ad-supported streaming, royalties from music videos played on YouTube and the dwindling market for music downloads, hit £782m last year – almost four times the size of income from the physical market in the UK.
“With so much of the world in lockdown and live music shut down, in nearly every corner of the globe most fans enjoyed music via streaming,” said Frances Moore, the chief executive of international music body the IFPI.
Overall, UK record labels enjoyed a 3.8% increase in total income to £1.1bn last year. However, the industry still believes that not everyone is paying their fair share. Google-owned YouTube, where tens of billions of music videos are viewed each year, paid just £43.8m in royalties to labels last year. This is about half the £86.5m labels made from a cut of the sale of 4.8m vinyl records.
The best-selling vinyl titles in 2020
1 Fleetwood Mac – Rumours
2 Oasis – What’s The Story, Morning Glory?
3 Amy Winehouse – Back To Black
4 Harry Styles – Fine Line
5 Kylie Minogue – Disco
6 AC/DC – Power Up
Source: Official Charts Company