ERA’s 2024 Yearbook - which maps entertainment retail and consumption trends during 2023 - shows that Millennials are most likely to reduce their entertainment spending, with 33% saying that they intended to cut back on the number of entertainment subscriptions they have. This compares to just 27% for Gen Z and Gen X.
Meanwhile, mail order and physical music is booming, seeing double digit year on year growth in significant areas.
Millennials, says the report, “are also the most important generation in terms of entertainment consumption”, with 36.1% of the generation having a paid music subscription, compared to just 9.6% and 0.4% of the - comparatively - uber-wealthy Boomer and “Silent” generations.
While ERA’s subscription-scrapper stats include all entertainment subscription categories, including on-demand video and gaming, the fact that Millennials are simultaneously most likely to have a paid-for music subscription whilst also being most likely to cut back spending on entertainment subscriptions should provide pause for thought for streaming platforms as they look at how to retain existing subscribers.
At the same time, short-form video and podcasts have grown their share of consumers’ entertainment attention budget - the number of hours spent consuming various forms of content - while social media has seen a sharp drop.
More startlingly, the amount of time people spend consuming audiobooks has dropped sharply, by 16%. Audiobooks account for just 2.7 hours consumption each month, compared to 12.4 hours spent consuming short-form video, 27.3 hours consuming social media, and 28.9 hours consuming music each month.
With Spotify making a disastrous over-investment in podcasts, and now switching their focus to audiobooks, this may make sobering reading for CEO Daniel Ek and his team, with the ERA stats suggesting that the audiobook opportunity in the UK - one of the world’s leading entertainment markets - may not be as strong as Spotify is hoping.
Podcasts have grown slightly - from 3.7 hours a month to 4.2 hours - while live music has jumped 11% to 3.1 hours each month. Again, millennials dominate live music consumption - at least in one sector - with 47.4% of music festival goers falling into the Millennial demographic while just 14.5% of festival goers are Gen X, and 28.2% are Gen Z.
Cross referencing the ERA stats with the Engaging With Music’ report from global record industry trade group IFPI provides an interesting comparative metric.
IFPI said that consumers across their “core 18 countries” spent an average of 20.7 hours a week - or 89.7 hours a month - listening to music. However, this included a range of consumption formats, including streaming, long- and short-form video, radio, physical and downloads, live music and “other forms” of consumption.
On average, 32% of consumption from IFPI’s consumer panel came from streaming - which works out to 28.7 hours each month, which is within a whisker’s breadth of ERA’s 28.9 hours - suggesting that this is a fairly robust indicator.
IFPI said that 4% of music consumption was live music, equating to 3.6 hours - just 30 minutes different from ERA’s 3.1 hours.
ERA says that people listen to an average of 19.9 hours of radio - while IFPI says 17% of their panel’s 89.7 hours of music consumption is listening to music on radio, equating to 15.25 hours. This suggests that music radio dominates radio listening, while talk radio may account for as little as five hours a month, or just nine minutes per day.
On streaming, Spotify dominates the UK streaming landscape, with 74.9% of consumers saying that they streamed music on Spotify, while 23% said they streamed music on Apple Music, and 30.9% said they listened on Amazon Music. However, it’s important to note that these stats are not necessarily mutually exclusive, as people may use multiple streaming services to listen.
However, Apple Music sitting at 23% is particularly notable. Spotify has a free tier and Amazon Music has a library of music that can be accessed by Amazon Prime subscribers. Apple Music requires an active subscription - or at least active premium trial.
Given the recent announcement by Apple Music that it will penalise content that is not delivered as spatial audio, splitting the royalty pool to take money from non-spatial content and funnelling it to “spatial available” plays, this stat is of particular interest.
Could Apple Music be making £500 million+ a year in the UK?
If we combine this with other stats we can get a picture of just how many people in the UK might be paying for Apple Music.
IFPI says that 48% of its “core 18” panel have a paid subscription for music; ERA says that 41% of paying subscribers have a single use subscription. ONS data for 2023 for England and Wales shows a total population of 60.2 million, of which 47.2 million - 78.4% - are aged 18 or over, with 36.7 million aged 18 to 65.
Combine these various numbers - population aged over eighteen, percentage of population with a paid subscription, percentage of streaming listening on Apple Music, percentage of single use subscriptions and you could - very bluntly - extrapolate that Apple Music might have 5.2 million users in England and Wales, of whom around 2.14 million are paying £10.99 a month - a total of around £280 million in subscription revenues. Apply this to the UK-wide population of around 67.3 million and we get 2.39 million subscribers bringing in £315 million.
Apple offers very generous free trials of six months with any qualifying audio device - which includes their entry level “2nd generation” Airpods (£129) and HomePod Mini (£99) which may account for 23% of ERA respondents saying that they are on a free trial of a subscription streaming service. A further 19% of respondents say that they are on a family subscription, paid for by themselves or another family member, which - at £16.99 for the Apple Music Family plan - could mean as much as another £200-250 million or so flowing through Apple Music each year.
Lastly - and very positively for many - independent music retail and mail order are booming. With average prices of £11.09 for CD albums and £27.40 for vinyl LPs and an overall average selling price of £17.09 at independent/generalist and specialist retailers (ISG) and £16.16 from mail order retailers, physical music sales remain strong - and are showing positive price growth of 8.1% (ISG) and 11.4% (mail order).
CD sales were worth £126.2 million, up from £124 million in 2022 - despite a drop in units shifted with 2023 seeing 11.4 million vs 2022’s 12.2 million. Meanwhile, vinyl LPs brought in £177.3 million, up an incredible 17.8% from 2022’s £150.5 million, with 6.5 million units in 2023 up 11.8% from 5.6 million in 2022.
Independent retailers represent 23% of total music outlets, with 461 independent record shops in 2023, up 18.2% from 2020’s COVID-impacted 390 - and still 8.5% up from 2019’s pre-COVID 425. Just over a thousand supermarkets still stock physical music, compared to a peak of 8667 in 2015.
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