Death To The CD?
According to the British Phonographic Industry (BPI) digital sales have surpassed physical ones for the first time. During the first three months of the year (Q1), digital records accounted for 55.5% of the £155.8m spent on music in the UK.
The BPI’s music revenues are based on downloads, subscriptions and ad-supported music services such as Spotify and We7. The BPI’s figures show that income from digital sales has risen by nearly a quarter year-on-year to £86.5m, whilst physical formats such as CDs and vinyl have dropped by 15% to £69.3m. The highest selling digital album in Q1 was ‘Born To Die’ by moody songstress Lana Del Ray, which came in second behind Adele’s ‘21’ in the physical sales.
BPI chief executive Geoff Taylor said the results were a “significant milestone in the evolution of the music business, UK record labels have embraced digital to their core, supporting innovation and licensing more new online and mobile services than any other country. As a result, the industry's prospects for growth look brighter than for several years.”
Demand for CDs still remains strong however, and Music Week head of business analysis Paul Williams thinks the CD will be with us for many years to come, “People get used to a certain way. In the past the shift has been physical to physical but now it's different; it's physical to virtual. Generally, the older audience prefers to buy the physical format, that doesn't mean everyone, there are some who will download. The CD still makes up the majority of album sales in the UK and that's going to remain the case for some time.”
Music industry profits have fallen considerably within the last decade. Last year the industry was worth £795m in comparison to 2003 when it was worth £1.2bn.