The Entertainment Retailers Association (ERA) has recently released its recorded music market figures for the year 2022, which track the retail sales revenue followed by the Official Charts Company rather than units.
According to the preliminary figures, which will be confirmed in March, music sales, including physical, streaming, and downloads, have increased by 3% in 2022 to almost £2 billion (£1.987bn), reaching their highest level since 2003 and nearly double the level of their low point in 2013.
ERA CEO Kim Bayley stated, “We are approaching a watershed. Thanks to the investment and ingenuity of streaming services on the one hand and to the physical retailers who have driven the vinyl revival on the other, music is within sight of exceeding £2bn in retail sales value for the first time in more than two decades. Music has to be great to win people’s attention, but it’s the buying and consumption experience which ultimately persuades people to put their hands in their pockets.”
One of the key factors contributing to the growth in music sales was the streaming services offered by major companies such as Spotify, YouTube, Amazon, and Apple Music. Subscription streaming revenues grew 5% year-on-year to £1.66 billion, and according to the BPI’s volume figures, audio streams increased 8.2% to 159 billion streams.
On the other hand, physical music sales saw a slight decline of 3.8% to £280.4m, but ERA noted that the figures were levelling out as the higher-priced vinyl format showed sustained growth while CD sales slipped. The BPI reported a 13.1% decline in physical album units, though, for CD alone, the unit sales decline was 19.3%.
Vinyl album sales, however, showed significant growth, increasing by 11% to £150.5m, while CD album sales fell 17.4% to £124m. This marks the first time vinyl outsold CD by value since 1987, and the change had been predicted last year by ERA, but the scale of the gap in the first year they have swapped places is significant.
Despite the positive results for vinyl sales, Bayley stressed that retailers were still subject to the prevailing economic pressures. “Revenue is certainly up, but the challenge in 2022 was more about profitability,” she said. “After years when securing top-line growth was the challenge, with soaring energy costs and inflationary pressure on wages, the issue now [for retailers] is turning revenue into profits.”
The long-running issue with vinyl has been with the production capacity and supply, though there have been some signs that the situation has improved. “There are still manufacturing delays with labels having to press many months up front,” said Bayley. “Whilst it could clearly be better, both labels and retail are learning to manage these constraints, and the market is still growing. The addition of any new capacity should be welcomed.”
In 2022, the vinyl market also showed a shift towards current releases over catalogue, with eight out of the Top 10 sellers of 2022 – including LPs from Harry Styles, Taylor Swift, Liam Gallagher, Arctic Monkeys, Wet Leg, Fontaines DC, The 1975 and Muse – being released in the past 12 months. This trend is indicative of the growing popularity of vinyl among younger generations.