More artists reaping the rewards of streaming, BPI data shows

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^th January 2021.  See Notes for BPI data and information.

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.

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.

Notes to Editors:

Summary of key data from previous BPI reports and announcements

Labels fuel growth through higher investment in artists and marketing:

• UK labels are investing more into the creating and engaging fans with music – up to 40% of trade revenues is invested into A&R artist signings and new talent development and marketing and promotion combined: A&R has risen to over £250 million in 2019, up 50% on 2014, and representing around 25% of annual trade revenues; a further £150m annually (2019) is going into digital marketing that help artists connect with fans around the world. It typically requires up to £1.5m to help break an artist globally.
• In addition to signings made by indie labels, major labels alone signed 153 new artists in the UK in 2019 (up 38% on 2010), contributing to a total roster on major labels last year of 640 acts (up 68% on 2010);
• Broadly, only 1 in 10 artists are expected to succeed commercially.

Tastes change and popularity drives success: fans are choosing to listen to a new wave of artists, now benefitting from streaming growth

• What binds thousands of diverse talents is that they are achieving chart success through tens or hundreds of millions of UK streams as well as many millions more overseas, building huge fanbases and boosting the profile of British music globally;
• Alongside global superstars such as Adele and Ed Sheeran, and exciting names in rock, pop, dance and rap such as Dua Lipa, Lewis Capaldi, Harry Styles, Calvin Harris, Stormzy and Arctic Monkeys, some of today’s most commercially successful new artists are also in genres such as rap, hip hop, pop & dance;
• Many are achieving hundreds of millions of streams in the UK – such as D-Block Europe, Aitch, AJ Tracey, Headie One, J Hus and KSI, dance artist Joel Corry, and singer-songwriter Gerry Cinnamon, who are among the hundreds of artists achieving hundreds of millions of streams in the UK and more globally; 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.
• In addition to the streaming volumes highlighted above: the top 10 streaming artists in the UK are now achieving around half a billion streams or more annually in the UK alone; artists that are top-200 ranked are seeing 100 million-plus streams.
• 1 million streams may sound a lot out of context, but 8,000 artists are achieving over this annually in the UK. In 2015, 1.5 million weekly streams would have secured a Top 10 audio stream spot, now it would barely make the Top 40. The yardstick for success is informed by the fact there may soon be over 3 billion UK audio streams in a single week in the UK. 
• Royalties from streams accrue over many years – for labels as well as artists and songwriters. Streaming income can only be evaluated over time and in the context of the demand for the individual track or album.

More artists share in the benefits of streaming than in the CD era; the global nature of streaming increases the opportunity

• Streaming has made the market more “democratic”: the top 10 acts dominate less of streaming (5%) in 2020 than for CD sales (12.7%) in 2005. But the fact that there are many more artists available now than in the CD era means the available royalty pool is spread more widely overall;
• 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;
• Indeed, UK artists are benefitting from the global opportunities that streaming offers. UK artists claim 1 in 10 global streams and data show that the top 1,500 artists in the UK have on average, nine times as many streams outside the UK as they generate inside the UK; over 300 British artists achieving 100m streams or more annually on a global basis. This means significant additional royalties for artists, on top of what they earn from UK streams.

¹ £1.33 representing total artist remuneration, includes royalties and written off advances.