UK ALBUM SALES INCREASE IN 2013

I know we're supposed to be lamenting the gradual loss of the music industry "as we know it", but despite the massive state of flux in which it finds itself, it has seen some real growth in the first three months of this year. 

The BPI, the trade body of the British Recorded Music Industry, have released a set of very revealing figures which show that combined CD and digital album sales were up 1.4% in the three months to the end of March. That might not sound like very much, but the trend had been stuttering since 2010 and, of course, we've also endured some pretty grim weather so far in 2013 which hasn't made it any easier out on the High Street. Digging into the figures, it's even more positive as it's the first quarter's growth since the last quarter of 2009. I suspect some of the growth came from massive discounting at HMV before it was rescued, but nevertheless, it's another sign that the music-buying public might be returning to their former habits.

In my last piece (available here), I highlighted three trends which might help give the industry a nudge in the right direction - the saving of HMV, the growth of crowd-funding phenomena such as Kickstarter and the annual music fest that is Record Store Day. Is there a link between these and the growth in sales? I think we need to leave it another quarter at least before we draw any firm conclusions, but my gut feel is that, well, they can't have done any harm, can they?

Let's take a more detailed look at the BPI figures.

Album Sales Hit 23.3 Million

Compared to the same period last year, an extra 300,000 albums have been sold in the first quarter. In the increasingly digital world, that's no mean feat since consumers have shown an increasing preference for individual songs and singles - a trend which has seen singles sales (often boosted by back catalogue content) become very healthy indeed. Beneath that figure, CD sales continue to decline and digital albums increase, the latter format accounting for 9 million (38.6%). A positive sign for audiophiles was the continuing growth of vinyl LPs, the growth (albeit from a low base) was an incredible 78.1% - the third quarter of growth and one which underlines that bands and record labels are increasingly getting their sales strategies right.

David Bowie
Surprise return in February with his first new album
in some ten years - in went straight to number one
despite no formal publicity, interviews or
 appearances. Just the power of dropping a
video onto You Tube and sitting back.

The overall sales growth has also been helped by a combination of striking new artists emerging (such as Emeli Sande, Jake Bugg and Mumford & Sons), the enduring popularity of the "Now" series of compilations (the 84th having just been released) and the sudden and welcome rebirth of David Bowie and his new album, The Next Day. Another key aspect of the numbers is the relative health of indie bands and labels with their releases and growing confidence in the still uncertain economic climate. Acts such as Nick Cave & The Bad Seeds, Biffy Clyro, Bastille, The Stereophonics and Atoms For Peace all sold well and helped the "indies" to secure more than 11% of total sales. Pleasingly, veteran artist Richard Thompson with his new album Electric saw a return to the mainstream charts and is so far well within the Top 20 selling indie artists of the year.

Table 1 - Top 20 Best-Selling Albums - Q1, 2013

Table 2 - Top 20 Best-Selling Indie Albums - Q1, 2013 

Singles Sales Continue Upward Trends

There's a view that the weekly music charts on Radio 1 no longer have the cachet or influence that they once did.

The received wisdom is that nobody buys singles anymore, we no longer all gather around the radio on a Sunday to listen to the run-down and that since the demise of TV's Top of The Pops, everything's so much more fragmented these days.

Macklemore & Ryan Lewis
Half a million sales for Thrift Shop

It is true that the race to achieve a big-selling number one hit is somewhat devalued other than during the run-in to Christmas. It takes fewer sales than of yore to get into the charts or the top twenty and thus, the number one slot - but despite this, sales continue to grow. The first quarter this year saw 48.5 million singles sold, nearly one for every member of the population of England and a 3.9% increase on the same period in 2012 and continuing a growth trend started some while ago. How does this equate with the lower sales per single to get in the charts? The truth is that there are more singles available than before (as noted before, digital back catalogues have become very popular) and purchases have become much more diverse. Even so, the biggest selling single so far this year has sold a massive 510,000 -  rappers Macklemore and Ryan Lewis seem to have got the touch as far as the single-buying public is concerned.

Another trend which is having an impact is the increasing ease by which bands can get their music produced and published: there's an immediacy with releasing songs that didn't exist in a purely vinyl or CD era. Artists no longer have to wait to create a killer album, they're taking more and more advantage of the EP format, four or five songs to test the water and grow their base. Whilst EPs probably barely scratch the surface in terms of total UK sales, they play an important role in maintaining band name awareness - so critical for the music press and buyers alike.

Where Next?

Indie darling Laura Marling - her much anticipated
fourth album "Once I Was An Eagle" is due for
release on May 27th. Big sales are expected. 

There are a number of key album releases lined up for the current quarter, ranging from indie folk songstress Laura Marling through Michael Buble to the re-invented Rod Stewart. With HMV saved and a High Street presence secured, with Record Store Day looming this coming Saturday (April 20th) and general UK retail sales showing some small signs of recovery, I'd bet that the album growth trend will continue.

In a world where we all have our likes and dislikes, the bands and artists who we love and enjoy and those we despise, does any of this talk of *growth* really matter? I think it does. It breeds a confidence which feeds through to musicians, whether they are experienced acts or just those barely starting out. With that confidence, there's a chance for them to make some music - and a good chance that we'll get to listen to it.

And that is to be applauded.

Alan Dorey  

    

A LITTLE RAY OF SUNSHINE

It's been a rather dispiriting few months in the music industry with the continued decline in physical music sales and the troubles affecting HMV. 

Added to this has been the news that 2012 saw a slowing in the growth of digital sales, which although still on an upward trend, are no longer sufficient to plug the gap left by the fall away of CD purchases.

There's still plenty of good music around with bands and artists doing all they can to get their musical endeavours out in front of the public - but there's no doubt they have to be smarter and work much harder to earn a decent income. 

So, why am I a little optimistic?

A number of factors are coming together which might enable some sort of stability in the music business, a stability which would be most welcome by creators and consumers alike. I'm not suggesting that there is a problem-solving panacea just around the corner, but I do believe that there are some real opportunities to be seized. 

Let's take a look at them.

HMV SAVED

I've written previously about the long, slow and agonising death throes of HMV (most recently right here:  HMV Store Closures Announced )

An all-too-common site at HMV
stores in the past two months

I'd tried to be positive about the future of the remaining HMV estate and couldn't believe that the music industry would want it to go to the wall and close off volume CD sales. I was pleased to see that Hilco, a "distressed business restructuring specialist" was in the frame for acquiring the business, but uncertain as to what they would actually do if successful. Over 80 HMV stores had already been closed by the administrator and whatever behind-the-scenes power-brokering was going on, it was clear that the news vacuum wasn't helping.

Today, Hilco have confirmed their purchase of the remaining 141 stores (25 of which had already been confirmed for closure), saving 2500 jobs in the process and thus paving the way for some sort of continued High Street musical presence around the UK. They already own HMV Canada and have turned that round, closing large out of town sites (expensive to operate) and majored on smaller more music-focussed stores. They note that the UK market is more difficult, but have expressed confidence that they can put the business back on to the road to recovery. Already, they've ditched the sale of mobile phones, tablets and other such accessories in a bid to get closer to the raison d'etre of the stores: selling music and movies. Hilco's Chief Executive Paul McGowan says that "HMV Canada is now trading strongly and....we believe that (the UK) has a succsseful future ahead". 

Two key things Hilco have said give me some cause for hope: they're retaining the FOPP sub-brand (nine stores which might provide a template for increased music sales) and have confirmed that they'll be increasing the range of music offerings. Admittedly, there had been  retrenchment in the past couple of years with many of HMV's specialist genre sections disappearing or being minimised into a handful of populist titles, but to see an acknowledgement that they must have the range and variety is good to hear.

With a fair wind, the Hilco
acquisition of HMV will be a Good Thing

I'm not suggesting that HMV is the lifeblood of the UK music retail industry, but it is a key component and has a critical mass which is more distinct and less amorphous than that of the independent music stores. Critical mass means that it can punch above its weight and give record companies and distributors some certainty about sales volumes. This is even more important when on-line retailers such as play.com are now struggling in the face of the removal of VAT-free treatment and they're having to compete harder with the rest of the UK.

And, whilst many people do like to buy their musical wares as digital downloads, there are still many customers around the UK who want the experience of browsing in a real store and the chance to buy a tangible product. HMV will underpin that desire and I hope that its forthcoming revitalisation works.

These are the HMV and FOPP stores that will now remain open:

Aberdeen, Ayr, Banbury, Bangor, Basildon, Basingstoke, Bath, Belfast Donegall Arcade, Birmingham Bullring, Blackpool, Bluewater, Bournemouth, Bradford, Brighton Churchill, Bristol Broadmead, Bristol Cribbs, Bromley, Bury, Bury St Edmunds, Cambridge, Canary Wharf, Canterbury, Cardiff, Carlisle, Chelmsford, Cheltenham, Chester, Chichester, Colchester, Coventry, Crawley, Cwmbran, Darlington, Derby, Doncaster, Dundee, East Kilbride, Eastbourne, Edinburgh Fort Retail, Edinburgh Ocean Terminal, Edinburgh Princes Street, Exeter, Bristol (Fopp), Cambridge (Fopp), Covent Garden (Fopp), Edinburgh (Fopp), Glasgow Byres Road (Fopp), Glasgow Union Street (Fopp), Gower Street London (Fopp), Manchester (Fopp), Nottingham (Fopp), Gateshead, Glasgow Argyle, Glasgow Buchanan, Glasgow Fort, Gloucester, Grimsby, Guernsey, Guildford, Hanley, Harlow, Harrogate, Hastings, Hatfield, Hereford, High Wycombe, Horsham, Hull, Inverness, Ipswich, Isle of Man, Isle of Wight, Islington, Jersey, Kettering, Kings Lynn, Kingston, Leamington Spa, Leeds Headrow, Leeds White Rose, Leicester, Lincoln, Liverpool One, Livingston, Llandudno, Maidstone, Manchester 90 Market Street, Manchester Trafford, Mansfield, Merry Hill, Middlesbrough, Milton Keynes, Newcastle, Newport (Wales), Northampton, Norwich Gentlemans Walk, Norwich Chapelfield, Nottingham Victoria, Nuneaton, Oxford, Oxford Circus, Peterborough Queensgate, Plymouth Drake Circus, Poole, Portsmouth Commercial Road, Portsmouth Gun Wharf Quay, Preston, Reading Oracle, Romford, Selfridges Oxford Street, Sheffield High Street, Sheffield Meadowhall, Shrewsbury, Solihull, Southampton, Southend Victoria, Southport, Speke Park, Staines, Stevenage, Stirling, Stockport, Stratford upon Avon, Stratford City Westfield, Sunderland, Sutton, Swansea, Taunton, Thanet, Thurrock, Truro, Tunbridge Wells, Uxbridge, Westfield London, Wimbledon, Winchester, Wolverhampton, Worcester, Worthing, Yeovil, York.

RECORD STORE DAY

The second trend that can aid music sales is - of course - Record Store Day.

It's now an international phenomenon and sees the third Saturday in April each year become the focus of a massive campaign to sell a wide range of CDs and LPs, many in special limited editions. The next event comes up in just over a week's time on April 20th and it's already shaping up to be a huge event in the retailing calendar. The ethos is very much one of record stores, artists and music fans joining together to preserve and promote the sale and enjoyment of a wide range of musical genres.

It all started back in 2007 in the USA when a number of fans and promoters led by Chris Brown got together to try and reverse the continuing decline in physical music sales. Their efforts were rewarded when hundreds of stores around the US found willing support from local bands and musicians who donated work, made free guest appearances and in some cases, released specially recorded or rare back-catalogue music to help make the campaign come alive.

The following year saw the UK join in when a number of our most iconic independent record stores grabbed the opportunity, stores such as Spicers in Cardiff, Jumbo Records in Leeds and (my personal favourite) Piccadilly Records in Manchester. The scale and interest in the event took off and bigger name bands and artists got involved, record labels saw a mutual interest in supporting record stores and increasing sales and the public truly embraced it.

Special Offers on Record Store Day?

There's a fine balance between it being an altruistic event, designed to help the music business survive - and even thrive - and a hard-nosed business transaction where record companies and  bands see an opportunity for profit. For every special limited edition release that is genuinely wanted by fans, how many are there which are merely opportunistic money-grabs with little redeeming value? So far, the balance has held out - albeit with a bit of tugging and pulling going on. This year's event seems set to be the biggest yet and the promotion has now spread beyond the US and UK to much of Europe too. Record stores are pinning their hopes on a bonanza day, many of them doing some excellent promotion, involving the bands and keeping their customers informed of the offers, deals and special releases they'll have.

Indeed, so popular is the event that (once again) stores won't be able to get enough stock to satisfy demand for certain of the special releases - which although frustrating, I suppose is a positive in that it maintains the interest. As long as the independents continue the good work all year round (building on the Record Store Day buzz), they'll hold onto some of the extra customers and gradually build their base - thus enabling greater sales opportunities in the future.

Jack White - Record Store Day
Ambassador

And when it comes to pass that artists such as Bob Dylan (with a 9500 limited edition new single), David Bowie (with a white label limited edition track from his new album) and Pink Floyd (with a special limited release of See Emily Play in 7 inch vinyl) are supporting it, there may well be cause to be positive for the future.

Here's a listing of many of this year's offers, so now there's no excuse, get down to your local Record Store and Do your Bit:

Record Store Day 2013 - Special Releases

KICKSTARTER

The final trend that is providing some solace to  bands and artists sits firmly in the realms of social media. It's part of what has become known as "crowd-funding", a process through which musicians can appeal directly to their fans for funds to enable them to record (for example) their next album. It's a trend that has exploded since it was first used in 2009 and whilst not a magic bullet, it has shown that it can be very effective indeed.

Kickstarter is a private-for-profit company founded in the US and they provide the infrastructure and on-line tools to artists to enable them to raise funds. Key to the process is that *investors* (usually fans) can't make a profit out of their involvement, but can receive special rewards such as exclusive limited editions or posters and T-Shirts and other items which may not cost much to produce, but are valued as "special" by the fan. Kickstarter doesn't just restrict itself to the music business - it's also been involved in fund-raising for stage shows, indie films and books and comics as well. Musicians need to approach it carefully - I can't see it really working for a band or act who don't already have some sort of following or local fan-base. They must have something that their fans want or desire, something they'll pay over the odds for in the hope that this odd sort of symbiotic relationship produces some fine new music. But work it does - and several acts have found that they've hit their fund-raising targets very quickly - all on-line and all facilitated by the Kickstarter ethos.

Kickstarter has grown in just four years to a business which has seen something approaching $400m pledged for over 75,000 projects, although there is a cautionary note that not all projects  get the green light. Kickstarter say that about 46% of initiatives raise the money that's needed, although that figure has gradually been increasing as the various parties become more used to how it works and what commitment they need to bring to it. There are a number of *name* artists who have made it work after failing to excite record labels, artists such as Tom Rush and Amanda Palmer, but I believe that the best and most exciting results are coming from emerging bands for whom the very notion of a record company taking them on board is but a pipe-dream.

Pipedream or Solution?

We mustn't always knock record companies and their labels. After all, many of them have less funding available to grow new music, are often part of large conglomerates for whom the bottom line is everything and are themselves uncertain about how they will survive. But, if new acts who have grown a local following can't see a label taking them on by offering them a recording advance, then Kickstarter could very well be an alternative route.

WHAT NEXT?

Three swallows does not a summer make, or whatever the musical equivalent is.

We are still deep in troubling economic times and there is little sign that we'll emerge from them just yet.

The underlying trends in the music business still grind onwards and are difficult to reverse.

However, the survival of a key chunk of the UK music selling business - HMV -  is a good sign. 

Combine that with the greater awareness of survivability from the independent stores (powered by Record Store Day) and the chance for bands to use Kickstarter to fund music production and we may have a chance.

The musical patient's illness need not be terminal and, given the right treatment, might make a reasonable recovery. 

I shall return to review the patient's case notes in the near future.

Alan Dorey