Streaming surge electrifies music industry that's been hit by piracy

Streaming services such as Spotify and Apple Music now account for the majority of music consumption, according to industry figures that also show a continuing vinyl revival.

BPI, which represents record labels, said that excluding radio last year Britons did more than half their listening via the internet, rising to more than 1.5 billion streams in a single week in December.

The claim that streaming accounted for more than half of overall music consumption is based on estimates of listening habits. The trend is nevertheless supported by separate financial data collected by the Entertainment Retailers Association, a trade group comprising streaming services and physical record sellers including Amazon and HMV.

It said that streaming revenues jumped by 42pc last year to £577m, more than outweighing a steep fall in download sales and a more gentle decline in sales of physical singles and albums.

Physical sales were down only 3pc, propped up by a booming vinyl market. Some 4.1 million LPs were sold, 20 times as many as a decade earlier, when interest in the analogue format was at its all-time low. Last year’s sales were worth £88m and accounted for one in every 10 physical music purchases.

Although Ed Sheeran’s latest album topped the both the streaming and vinyl charts last year, the vinyl chart was otherwise dominated by revived classics such as the 40th anniversary pressing of Rumours by Fleetwood Mac and a reissue of Pink Floyd’s Dark Side of the Moon.

The music industry’s new lease of life in recent years has been granted by new technology, however. Smartphone uptake and better mobile broadband have prompted consumers to subscribe in their millions to streaming services, reviving a sector that was on its knees after a decade of tumbling income and fears that download piracy would kill off investment in new talent.

Although BPI said “the music industry still has a long way to go to recover fully”, major labels are enjoying soaring valuations as investor confidence strengthens.

Wrangling over dividing the spoils of the streaming boom continue, particularly over the fees YouTube pays labels and the way artists are paid for individual streams on Spotify and Apple Music.