Executive Summary
In 1996, the UK market for prerecorded music products was estimated to be
worth £1.81bn, at retailers' selling prices (rsp). This represents an
increase in retail value of 7.1%, from the previous year's figure of
£1.69bn. Over the same period, the volume of sales increased by 7.4%, from
266.9 million units to 286.6 million units. Between 1991 and 1996, the market
showed a 42.7% increase in retail value, and a 44.2% increase in volume.
The compact disc (CD) format dominates the market, having accounted for 76.7%
of all albums sold, by volume, in 1996. Sales of vinyl, both in the single and
album formats, have declined sharply over the last 5 years. However, this
process has taken longer in the UK than other European markets. Cassette tapes
have settled at a stable volume, but as the rest of the market is growing
rapidly, they are losing share.
Pop and rock are the dominant musical genres, with 69% of album sales in 1996.
However, there are also significant segments in the market for dance, classical
music, jazz, country, and spoken word products. However, growth and
profitability in the market is dependent on the pop music market, where the
albums which had achieved a top 40 chart placing accounted for 22.5% of album
sales in 1995.
Sales of music products through non-traditional outlets, such as supermarkets
and petrol station shops, are growing. Increasing concentration on a few
successful recordings would be detrimental to the breadth of choice in the
industry as a whole, as would the establishment of deep discounting on the US
model.
The Internet offers new opportunities for both established record companies and
new independent labels to offer access to their products. As yet, however,
domestic Internet penetration in the UK is at a very low level, but it is
likely that it will begin to have significant impact on CD and tape sales in
the next 5 years.
However, despite encroachments from new technology, the album market is
expected to show average annual growth in volume of 7.2%, and in value of 6.7%
between 1997 and the year 2001. Over the same period, however, singles are set
to decline; showing an average annual fall in volume of 5.9%, and an average
annual value drop of 8.4%. This decline will not have a deep effect on the
value of the recorded music as a whole, due to the low unit cost of singles.
First Edition 1997
Edited by Louis Barfe
ISBN 1-85765-702-0
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