Trends in the consumption of recorded music (Edexcel A Level Business) : Revision Note

Key data

• According to the BPI (British Phonographic Industry), UK spending on recorded music increased by 4.8% to £1.49bn in 2024

  • Physical music sales rose by 1.3% to £246.5m

  • Digital download revenue dropped by 6.6% to £24.3 million

  • Streaming revenue totaled £1.02 billion to make up 68.1% of recorded music revenue

• UK recorded music consumption across sales and streams rose 9.7% last year to 200.5 million albums

Physical and digital formats

Dominance of digital consumption

• Since 2014, annual streaming revenue has increased by more than 800% in total to become the main format for recorded music in the UK

• In 2024, the UK's music consumption reached a record 201.4 million album equivalents, with streaming accounting for approximately 68% of total recorded music revenue

  • Paid subscriptions to services such as Amazon, Apple, Spotify and YouTube make up the vast majority of streaming revenue

    • These brought in £875.5 million in 2024 and account for more than 86% of the £1.02 billion UK streaming market

  • Digital download revenue dropped by 6.6% to £24.3 million, the second year in a row of modest decline

Resilience of physical formats

• Physical formats like vinyl and CDs saw a combined revenue increase of 1.3% in 2024, amounting to £246.5 million

  • Revenue from sales of vinyl LPs rose by 2.9% to £145.7 million

    • Revenue from vinyl grew more than 650% from £19.4 million in 2014

    • 6.7 million units were sold, an increase of 9.1%

    • In 2014, half of the year’s Top 10 sellers were catalogue (older) titles

    • Brand new releases play an increasingly significant role in growth - in 2024 eight of the year-end Top 10 were current releases, including Taylor Swift’s The Tortured Poets Department and Charli XCX's Brat

  • Revenue from sales of CDs fell by 0.5% in 2024 to £96.7 million

    • Over the last three years CD sales have stabilised to become a £90 million-plus annual market

    • In 2024, purchases totalled 10.5 million units

    • Like vinyl, the CD market is led by the popularity of new releases

    • Examples include new albums by Coldplay and Sabrina Carpenter

Revenue distribution between physical and digital formats over recent years

Dominance of streaming platforms

Market share of streaming services

• Streaming platforms like Spotify, Apple Music, and Amazon Music dominate the UK market, with streaming accounting for 68% of total recorded music revenue in 2024

Subscription growth

• The UK saw a 7.8% rise in streaming subscriptions in 2024, highlighting that there is a growing number of consumers willing to pay for music access

• Streaming has become a significant revenue source for artists

Growing importance of playlists

• Platforms like Spotify use advanced algorithms to curate personalised playlists such as 'Discover Weekly'

  • These playlists increase user engagement and encourage new music discovery

  • They have shifted listeners from active searching to passive discovery, impacting how new music is consumed and popularised

• Artificial intelligence is used to analyse user preferences, refining recommendations and influencing listening patterns

  • For artists, reliance on algorithms creates a challenge for visibility, as breaking into popular playlists can be competitive and algorithm-dependent

The influence of social media

TikTok's impact on music consumption

• TikTok has emerged as an important platform for music discovery, with viral trends leading to mainstream success for some songs and artists

  • In 2024, 10 of the 11 UK Official Chart number ones were tied to major TikTok trends

• The platform has led to the resurgence of older songs

  • In 2024, 19 out of the top 50 tracks on UK TikTok posts were more than five years old

• Virality on TikTok often leads to increased streams on music platforms, leading to additional revenue and exposure

  • Tik Tok users are 68% more likely to use a paid-for music streaming subscription than the general population

• Musicians are increasingly using TikTok for promotion to engage directly with fans and use the platform's algorithm to reach broader audiences

Vinyl revival

• Vinyl sales in the UK have experienced a revival in recent years, with over 6.7 million units sold in 2024, marking the 17th consecutive year of growth

• There are several reasons for this revival

  • Many listeners appreciate the physicality of vinyl records, including the larger album artwork and the act of playing a record

  • Vinyl enthusiasts often argue that records provide a warmer, more authentic sound compared to digital recordings

  • The vintage nature of vinyl records appeals to both older generations reminiscing and younger listeners drawn to retro trends

  • Purchasing vinyl records is seen by fans as a direct way to support their favourite artists, especially as streaming royalties are usually small

  • Record Store Day, established in 2007, has played a key role in promoting vinyl , encouraging exclusive releases and driving traffic to independent record stores

  • Vinyl releases often include exclusive content such as bonus tracks, special artwork and coloured discs, enhancing their appeal

• The return of vinyl records to the UK's inflation basket in 2024 reflects their renewed significance in consumer spending habits