analysis

Q3 2017 Analysis: Your guide to the market shares

Market Shares

If there’s been an unusual degree of volatility in the market shares in recent quarters, things reverted to type in Q3, at least for two of the three majors. David Hawkes is never truly happy unless Universal’s share ...

Q3 2017 Analysis: Your guide to the talent trends

TalentEd Sheeran. Ed Sheeran. Ed Sheeran. If the solo maestro was a football team, he’d be Real Madrid, as he once again steamrollered the opposition to make ÷ the biggest-selling album for the third quarter in a row. The album – so nailed on to be the biggest-selling album of 2017 that Sheeran’s local B&Q only has screws left – shifted another 218,812 copies (more than double its nearest competitor, Rag’N’Bone Man’s Human, with 99,020 copies) and has now sold a frankly ridiculous 2,219,797 units for the year-to-date. Most people might assume that means anyone with any interest has already bought it. Not Derek Allen, Warner Music UK’s SVP, commercial. “There’s loads more in the tank on Ed,” he says. “We’re up to 2.2m now and there’s potentially a lot more in there between now and Christmas – and then you’ve got the BRITs, so there are still a lot of opportunities. When you think Adele set the benchmark in terms of what can be achieved with an album, there’s still a big delta between where we are with Ed and where Adele ultimately ended up. There’s still a lot of ambition left in that campaign from Atlantic and the company as a whole.” Be afraid, everyone else, be very afraid. Warner can also claim one of the year’s most significant breakthroughs as Dua Lipa’s self-titled debut album (Warner Bros) took off in Q3, becoming the quarter’s No.10 album with 55,123 Q3 sales. And while the picture for debut artists looks much rosier than this time last year, it remains tough out there for those without a track record. “It’s much documented how hard it is to break artists, albeit the market is turning round,” says Allen. “It’s just re-learning industry metrics in terms of how streaming plays a part in bringing an artist to the wider public, and then converting that into commercial success.” Indeed, it’s increasingly clear that a two-tier artist system is developing, with youth-friendly artists dominating the booming tracks market, while older stars hold sway on albums. Only Sheeran, Dua Lipa and Calvin Harris appear in the quarter’s Top 10 for both formats. “There aren’t any huge volumes in albums [this quarter],” notes Universal’s Hawkes, whose company contributed two, wildly different albums to the Top 10, Lana Del Rey’s Lust For Life (Polydor) at No.8 (56,840 sales) and Glen Campbell’s Adios (UMC) at No.5 (60,852). “That’s testament to the release slate. Ed and Rag’N’Bone Man continue to perform particularly well, with a large percentage coming from streaming. Our performance in the quarter is representative of the releases we’ve put out and we were particularly quiet.” By contrast, Sony scored five of the Top 10 and had the two biggest releases of the quarter with the Foo Fighters and Arcade Fire’s Everything Now (Columbia), as Columbia’s revival under Ferdy Unger-Hamilton continued to roll. “Columbia have more than doubled their market share in albums,” says Leggatt. “But all the [Sony] labels have got records and artists in play. There’s a skill to that, and a bit of luck, maybe!” Yeah, tell that to Ed Sheeran.

Q3 2017 Analysis: Your guide to the market trends

Market TrendsQ3 is usually the runt of the year’s litter. An unloved three months when most of the biz is sunning itself in Ibiza and the big releases are either out of the way or being held back for its pushy younger brother, Q4. In many ways, Q3 2017 followed that script to the letter. The biggest release of the quarter, Foo Fighters’ Concrete And Gold (Columbia) – a Q4 release arriving a bit early, if ever there was one – only needed two weeks of sales to take that title, and the No.3 slot overall. And the rest of the release slate was light enough for Ed Sheeran’s X, released back in 2014, to still be the quarter’s ninth-biggest seller. But none of that had any impact on the streaming market, which continued to forge ahead, with stream equivalent albums (SEA) exploding by another 46.8% year-on-year for a total of 16.98 million. “The number of subscribers grows the [streaming] market rather than releases,” notes Sony Music Entertainment UK’s VP of sales and business development, Peter Leggatt. “New releases are purchased physically and downloaded and that drives volume and value but, long-term, it’s going to be about the number of subscribers paying to access music on a monthly or annual basis. I don’t think we could be disappointed with that.” Where the light release schedule did bite was on CD sales. Buoyed by surprisingly physical-heavy blockbusters such as Ed Sheeran’s ÷ (Asylum/Atlantic) and Rag’N’Bone Man’s Human (Best Laid Plans/Columbia) earlier in the year, they dropped faster in Q3 (down 13.3%) as few other such records have come through. The ongoing vinyl revival (up 30.6% year-on-year) continues to shore up physical’s role in the market but execs are hoping Q4’s traditional gifting bias will drive people to bricks and mortar stores as well as streaming services such as Spotify and Apple Music. “We still feel confident about physical,” says David Hawkes, MD of Universal Music UK’s Commercial Division. “We have got a great slate for Q4 which will perform particularly well in the physical space, which is great news for all our partners. HMV, the grocers, Amazon all have a major part to play in that market. It’s feeling really good and we’re going into a time of year where physical really comes into its own.” Let’s hope so. After all, the growth may be coming from streaming, but it’s physical’s trademark ‘unexpected resilience’ that continues to underpin record company revenues. Watch this space…

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