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PRS for Music 2010 figures show revenues down 4.8%

Plummeting CD sales, the continuing toll taken by digital piracy and a lack of big-name acts on tour fuelled a £189m drop in UK music revenues last year.

The music industry saw revenues decline 4.8% to £3.8bn in 2010 as the post-party hangover kicked in after a bumper 2009 driven by Susan Boyle's record-breaking debut and big-selling albums from Lady Gaga and Michael Jackson.

As consumers tightened their purse strings, nervous band managers decided against launching tours in case their acts failed to fill venues. After a decade of growth, live music revenues declined 6.8% to £1.48bn.

"A number of stadium- and arena-filling bands were not on tour and many of those that did tour opted to play smaller venues to limit their risk," said PRS for Music, the UK's music royalties body, in its report for 2010. The extent of the decline in acts touring the biggest venues was evident in a 70% fall in revenues from stadium gigs. Revenues from arena-sized venues also suffered, down about 14% year on year.

A bounceback in income from live gigs is expected this year as famous names such as Rihanna, Westlife, Justin Bieber and Take That all launch major tours.

The British love of festivals continued unabated with a 20% rise in revenues from ticket sales, thanks to events such as Latitude increasing in size and the launch of a number of new festivals.

Sales of CDs fell by 7.9% to £1.24bn as music piracy and the shift to digital services such as Spotify and Pandora continued to take their toll.

Half of the top-10 selling albums in 2010 were either releases from 2009, such as Lady Gaga and Michael Bublé, or compilations such as Now That's What I Call Music! 76. The number of breakthrough acts – those passing 100,000 album sales for the first time – hit a new low in 2010, with just 17 making the grade. In recent years the average has been about 25.

The 23-year-old singer-songwriter Adele has seen her multimillion-selling album 21 account for 10% of all sales in the first four months of the year.

"The success of Adele is as welcome as it is worrying," said the report. "While her feats at home and abroad are worth celebrating, what's worrying is the performance of the rest of the market."

Despite growth in revenue from digital services in the UK, up almost 20% year on year to £316.5m, the report said that hopes of a boost from legal streaming and download services appeared to have been overstated. Global digital revenue growth halved year on year to just 5.3%.

"While steep falls in physical revenues continued apace in 2010, there were clear signs that growth in digital revenues slowed across the main international recorded music industry markets," said the report.

"Put more bluntly, global digital revenues are not going to be the '$30bn baby' people talked about five years ago. Indeed, they may stabilise at around $5bn [£3bn]."

Trade bodies representing the UK music industry – as well as counterparts in the film and TV sectors – were disappointed after the government announced on Wednesday that it has scrapped plans to introduce legislation to force internet companies to block websites accused of illegal filesharing.

A brighter note was provided by business-to-business revenues – which include royalty collections from businesses that play music, the licensing of music services such as Spotify, advertising and sponsorship – which rose 2.6% to £1.06bn.

"It comes as no surprise that the overall numbers are down 5% as consumers are feeling their wallets tighten," said Will Page, chief economist for PRS for Music.

"However, the licensing revenue streams which lie outside of the conventional radar are not only displaying impressive growth but illustrating the pace of diversification now taking place in the UK music industry."


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