November is here and it’s a time for major new releases.
The Cure have released Songs Of A Lost World (Polydor) with a big media push on BBC Radio 2 (for the In Concert series, pictured), 6 Music and BBC Two, which devoted Saturday night’s schedule to the band.
The hugely influential group are getting strong reviews for their first album in 16 years, which is no doubt contributing to impressive sales of the multiple versions of the vinyl edition.
According to the Midweek sales flash, Songs Of A Lost World is on course to be The Cure’s first No.1 album in 32 years, with consumption so far of 40,918 (Official Charts Company), including 36,970 physical copies, 2,838 downloads and 1,110 sales-equivalent streams.
Still to come, there’s a significant return for Linkin Park with From Zero (Warner Records) on November 15, alongside the much-anticipated debut from Music Week cover stars FLO (Island), the first album in five years for Mercury winner Michael Kiwanuka (Polydor) and the perennial favourites Michael Ball & Aflie Boe, now transferred to BMG.
But as the Q4 period hots up, how much does it still matter for the sector?
In the summer, Music Week revealed that combined physical unit sales are on course for their first year-on-year increase in two decades (vinyl alone has been on the rise for much of that time). Based on retail revenue, physical sales have been on the increase since 2021, a feat repeated in 2023 with growth of 10.9% to £311 million (but not 2022 when sales were down 4%).
According to BPI stats for label revenue, the UK’s physical music market increased in value by 12.8% in 2023 to £243.4m, its highest level in six years. Physical music sales were responsible for just under 20% of the total revenue generated by the UK recorded music market.
The value of the UK’s vinyl LP market increased by 18.6% in 2023 to £141.6m, more than 10 times what it was worth a decade earlier. In fact, more vinyl LPs were sold in the UK in 2023 than in any year since 1990, with sales growing for the 16th consecutive year.
While vinyl LPs generated higher revenue in 2023, more CDs were sold – almost 11 million, compared to 6.1 million vinyl LPs. CD revenue in the UK is growing again, rising by 5.4% to £97.2 million in 2023.
Of course, physical is now a much reduced part of the overall recorded music market, even if it's increasingly lucrative as vinyl prices increase. ERA figures for 2023 show physical revenue of £311 million represents 14% of the total music retail market, with streaming accounting for 84.1% (downloads take the tiny remaining share).
Retail is proving itself a worthy partner for the music industry
Kim Bayley
Kim Bayley, CEO of digital entertainment and retail association ERA, said: “The days when a good Q4 release slate was a matter of life or death for ERA’s members are long behind us. While new releases are the lifeblood of the music industry, no one takes out a streaming subscription because of the release of a particular album. A majority streaming economy means the revenues we generate for the music industry are a lot more predictable.
“To spell it out, last year even in Q4 60% of [physical] revenue came from catalogue rather than frontline. Physical revenues certainly benefit from Q4, but much of that is still catalogue and the entire physical market accounted for less than 20% of sector revenue in Q4 last year.”
Nevertheless, there’s definitely a Q4 bump in the gifting season. In the fourth quarter of 2023, pure album sales accounted for 6,423,846 units (Official Charts Company), up 53% on the previous quarter.
According to BPI data for physical sales, 2023 Q4’s total of 5.7m accounted for 33.5% of the annual physical sales (over-indexing by 8.5 percentage points). For the mix of formats, the skew in Q4 2023 shows vinyl’s quarterly sales representing around 35% of the format’s annual sales total, while it was around 32.5% for CD.
With an increasing focus on superfans and strong sales for releases by Taylor Swift, Coldplay and Charli XCX, there is a clear opportunity to maximise physical sales.
“The excitement around new releases drives purchase and consumption, but we know that in a majority-streaming world the link between consumption and revenue is less than it’s ever been,” said Bayley.
“That said, our friends in the record companies are doing a great job in coming up with an eye-catching slate for Q4 2024. Coldplay, Linkin Park and Andrea Bocelli should all do strong business and we expect good follow-through from Taylor Swift, The Last Dinner Party and Charli XCX. Meanwhile catalogue is well-catered-for with ABBA, The Beatles, Queen and the continuing resurgence of Oasis.”
Bayley also welcomed the commitment to physical formats from the retail sector.
“Physical retailers are certainly playing their part and store openings from HMV and latterly Rough Trade and the resurgence of indie store numbers are helping drive both vinyl and CD revenues,” she said. “And almost as significant as Q4 these days are our two great promotions of the year – Record Store Day and National Album Day – where we work hand-in-hand with our record label partners to proactively drive engagement with music. With year-to-date physical music sales currently tracking around 8% up on the same period last year, retail is proving itself a worthy partner for the music industry.”
Subscribers can read our full Q4 report here.
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