Music streaming is to overtake physical sales as the biggest generator of income for UK according to figures released by the British Phonographic Industry (BPI).
Streaming accounted for 30% of overall label revenues in 2016, compared to 32% for physical sales. According to the BPI, the rate of growth means that streaming is expected to overtake physical Cd and Vinyl sales in 2017.
According to the BPI’s report, 11% of the UK’s adult population were subscribed to a service such as Apple Music or Spotify at the end of 2016. This means that customers are continuing to opt for subscriptions to streaming services rather than popping into their local music store.
The figures also revealed that overall revenue (streaming, physical and download sales, performance rights and licensed music) rose by 5.1%. The £926 million total is the largest in five years.
The boom in streaming and rise in overall revenue for the UK music industry now mirrors that of the US, where streaming accounted for a massive 51% of all revenue in 2016.
Subscriptions to Spotify, Apple and other services such as Deezer accounted for 87 per cent of the £273m overall streaming revenues.
Earlier this week figures showed that vinyl sales were up 35.8 per cent in the first quarter of 2017 compared to last year. Several key releases that would of contributed to the rise, includes Ed Sheeran's latest album and Rag 'N' Bone Man's Human. They were also credited with helping get the UK music industry off to a positive start to the year, as fans bought physical copies of their records as well as streaming them online.
David Bowie's final album Blackstar was the best selling vinyl LP in the UK in 2016 alongside four more Bowie albums were among the top vinyl sellers last year: The Rise and Fall of Ziggy Stardust, Hunky Dory, Nothing Has Changed - The Very Best Of, and Changesonebowie.
More than three million LPs were sold in 2016, the first time that threshold has been passed for 25 years, according to a report from the BPI.
Other big sellers in 2016 included Amy Winehouse's Back to Black, Bob Marley, Prince, and Nirvana.
Geoff Taylor, chief executive of the BPI, said that the British music sector was in rude health, but warned that the Government should prioritise creative industries in a post-Brexit world.
"It means making sure that UK artists can tour freely in EU markets and that UK businesses can access the best talent," he said.
"It means taking firm action against illegal websites that deny artists a living, and it means making clear in UK law that huge online platforms must pay fair royalties for the music they use."
The BPI also highlighted a "growing mismatch between the huge value that certain digital platforms, such as YouTube, extract from music or other entertainment and the relatively small amount they return back to the creators concerned".
A YouTube spokesperson said it was working "with the music industry to bring more money to artists, labels and publishers" and that YouTube had paid out more than $1bn to the music industry globally from advertising in the past year.