Our recent Media Nations research, which took a look at how people in the UK use and consume media, highlighted a trend that might come as a surprise.
We found that, at a time when music streaming services are the go-to option for many listeners, consumer spend on physical music formats such as CDs and vinyl records increased by 10% between 2022 and 2023, the period covered by the research.
This increase bucked the long-term shift in how we spend on music, from physical to digital formats, and was driven by growth in expenditure on CDs - reflecting a rise in the average price of a CD album - as well as continued growth in spending on vinyl formats.
However, despite some artists recently releasing new music on cassette format, the number of cassettes sold in 2023 fell by 30% year on year.
Reflecting the growing power of music streaming services, subscriptions continue to account for 84% of total consumer spending on music. Consumer spending on subscriptions grew by 10% to reach almost £1.9bn in 2023.
Streaming accounts for two-thirds of recorded music industry income
The recorded music industry generates its revenue from a range of sources, including royalty payments from streaming services. Payments from streaming services continued to account for two-thirds of the industry’s total UK revenues in 2023, in line with previous years.
Recorded music industry revenues from streaming grew by 8% to £962m in 2023. Over the same period, the total number of audio streams in the UK grew by 13% to reach 180bn.
Streaming services, including Spotify, have made changes to the way in which they pay royalties to rights-holders. Announced in November 2023, and operational from April 2024, Spotify now requires that a track has been streamed at least 1,000 times in the previous 12 months for it to generate royalties.
How do you prefer to access the music to listen to – and are you someone who spends on formats like CDs and vinyl?