UK: Revenues from digital music outstrip physical records

Sales of digital music services such as purchase through downloading and ad-funded services have beaten that of traditional physical copies for the first time in the United Kingdom, according to the British Phonographic Industry, MediaGuardian reported.

In the first quarter of 2012, digital accounted for 55.5 percent of UK trade revenues, according to the BPI. The year-on-year record industry revenues increase by 2.7 percent to £155.8 million. Digital sales have grown by nearly a quarter to £86.5 million, whereas physical records have slumped by 15 percent, to £69.3 million, DailyRecord.co.uk reported.

Revenues from paid-for subscriptions such as Spotify and We7 nearly doubled year-on-year to £9 million, as the increasing popularity of mobile music apps siphoning more subscription streaming, The Telegraph noted. 

“This is a significant milestone in the evolution of the music business. UK record labels have embraced digital to their core, supporting innovation and licensing more new online and mobile services than any other country,” said BPI chief executive Geoff Taylor, according to DailyRecord.co.uk.

Despite the optimistic point of view, many have pointed out that the landmark record of the first quarter was driven by the Christmas buying spree resulting from gift giving.

It is “the emergence of a new wave of seasonal purchase behaviour, what I call the Post-Holiday Surge”, Mark Mulligan wrote in the blog “Digital music sales and the role of the post-holiday surge”. He warned that the UK was still between a year and a half and two years behind the United States in its shift to digital. In the U.S., the digital revenue level pegged that of CDs and records in 2010, and beat the latter last year.

Echoing Mulligan’s comment, the Register's Andrew Orlowski also emphasised that the most music was bought in the final quarter of the calendar year, along with physcial box sets and music videos.

That’s probably why Taylor cautioned to MediaGuardian that “we will need to see this trend repeated for several quarters to say we have turned the corner."

Image: The Register