The popularity of subscription services reached record levels in the UK last year as music streaming revenues overtook ownership formats for the first time.
Revenues from paid-for music subscription services such as Spotify jumped 39 per cent last year to £829m, meaning subscriptions now account for 62 per cent of all music revenues, according to figures from the Entertainment Retailers Association (ERA).
The growth means music has followed video and games to become a majority ‘rental’ market for the first time. Traditional formats such as CDs, vinyl and downloads now account for just 38 per cent of music revenues.
The shift in consumer habits comes as streaming services such as Spotify, YouTube and Amazon continue to drive their users from free to paid-for models. Last month Spotify posted its first ever quarterly profit as its paid subscriptions hit just under 100m.
ERA chief executive Kim Bayley said: “For the first time since the birth of the modern entertainment business in the late 1950s, more revenue is coming from payments for access rather than purchase in all three sectors – music, video and games.
“New digital services have created a ‘Generation Rent’ for whom access models seem natural. It is nothing less than a revolution in the entertainment business.”
In the gaming sector, rental revenues overtook ownership in 2016, while video followed suit in 2017 as consumers flocked to services such as Netflix, Amazon Prime and Now TV.
Overall, UK entertainment revenues grew for the sixth consecutive year to a record £7.5bn, more than three-quarters of which came from digital services, according to the ERA.
Despite the overall shift, console games generated revenues of £765m last year, a decline of just 2.8 per cent in 2017, while vinyl grew 4.4 per cent last year thanks to the fomat’s recent return to vogue.