More artists reaping the rewards of streaming, BPI data shows
Around 1,800 artists now surpass 10 million streams annually in the UK alone – 72% more than achieved the equivalent 10,000 album sales in the CD and downloads era (2007)
The global reach of streaming amplifies UK artist success: listening outside the UK multiplies streaming volumes 9-times over for top 1500 artists in the UK; more than 300 UK artists achieve 100m global audio streams a year
Artists receive a larger share of revenues in streaming than in the CD era
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Music streaming is helping thousands of artists to hit major sales milestones in the UK and its global reach is amplifying artist success, new figures from record labels association the BPI show.
The data reveal that around 1,800 artists achieved more than 10 million streams in the UK alone in the past 12 months – 72% more than the total of 1,048 artists who achieved the equivalent 10,000 album sales in the CD, LP and download market of 2007. Streaming has also made the market more "democratic": the top 10 artists dominated less of streaming (5%) in 2020 than was the case for CD sales (13%) in 2005.
Moreover, global streaming data show that the top 1,500 artists in the UK generate on average nine times as many streams outside the UK as they do at home. While consumption of British rap and hip hop, along with some rock, remains primarily UK-focused, many British artists are achieving exceptional international success, in particular in genres such as pop, dance and electronica, with 300 British artists now achieving 100 million global streams or more annually. Around 400 artists, drawn from rock and pop's mainstream but increasingly also from rap, hip hop, dance and indie, were streamed more than 50m times in the UK.
The analysis by the BPI has been compiled ahead of senior executives from UK record labels appearing before the DCMS Select Committee Inquiry into the Economics of Music Streaming, which resumes on Tuesday morning 19 January 2021.
British music is a global success story – the third-largest market in the world and the second biggest exporter of music, surpassed only by the US. Its success is founded on a symbiotic creative partnership between labels and artists, which has driven the UK industry back to growth after years of piracy-driven decline. While recorded music is only one part of the broader music ecosystem, growth benefits the wider music community, including artists and songwriters. Record labels successfully adapted their models to streaming, enabling them to invest in a strong new wave of homegrown talent, with thousands of British artists achieving outstanding creative and commercial success across a broad range of musical genres.
Artists are receiving a higher share of revenues nowadays than they did in the CD era. As acknowledged by witnesses who have already appeared before the Committee, artist royalty rates are typically higher in streaming, commonly ranging between 20-30% – compared to CD era rates more typically at rates of 15%-20% of net PPD (and subject to deductions).
On average, based on a typical £9.99 subscription to a streaming service, labels receive gross revenues of around £4.33, of which artists receive £1.331. Of the label's remaining share of £3.00, costs represent £2.49 (including investment into artists such as A&R and global marketing) – this leaves a label margin of £0.51. The remaining £5.67 is received by: the exchequer (VAT); the streaming service (DSP); and publishers and songwriters.
Streaming is only one component of an artist's income – with global income/exports, live (once active again), physical sales on CD & vinyl, royalties from broadcast and being played in public, merchandise, sync, and licensing also contributing.
The BPI, which comprises a membership of over 450 independent and major labels, believes strongly that rather than changing a model that is working well for so many, the focus should be on continuing to grow revenues from streaming and music consumption generally for the benefit of the wider music community, including artists and songwriters.
In particular the BPI believes the UK Government should seek to introduce measures to derive more value from platforms – including: addressing issues with certain user-upload services, which return just a fraction of the value of premium services; combatting industrial-scale piracy, which continues to drain some £200 million annually from the UK recorded music economy; supporting British music's potential to double the value of exports to £1 billion over the next decade; and encouraging inward investment into UK music. Not least, the BPI renews its call on Government for more action to prioritise the return of the live music sector as speedily and safely as possible and to support venues, festivals and nightclubs until this can be achieved including through government backed insurance. This is the most effective measure that can be taken to restore performer incomes which have suffered as a result of the pandemic.
Action to address these issues can potentially add hundreds of millions of pounds to the value of streaming revenues that will benefit the wider music community.
Geoff Taylor, Chief Executive BPI, said:
"Britain's global leadership in music should not be taken for granted. Our international prominence, from The Beatles to Adele, Ed Sheeran and Dua Lipa, has been secured by marrying exceptional talent with investment and innovation from our dynamic record labels. As the UK seeks to grow its influence in world trade, it should be a priority to promote one of our country's major international successes, to ensure its long-term growth.
"A generation of new talent is now able to reach a global audience, achieve success, and earn a living thanks to streaming. The low barriers to entry for streaming mean that rewards are shared between hundreds of thousands of artists. The most effective way policymakers can support the future success of British music, including its artists and songwriters, is through measures to maximise the total revenues generated from streaming. Tampering with a streaming model that is delivering more investment into more new artists, and providing greater consumer and artist choice, risks undermining the competitiveness that underlies the UK's exceptional global success."
UK recorded music is a global success story. Investment into artists and new music has created a virtuous cycle of growth, and exciting opportunities lie ahead, including annual music exports that could be worth over a £1 billion by the end of the decade. It is vital that precipitate action does not derail this growth and the future prospects of British music.
January 19, 2021 1:00am ET by Pressparty