UK's half-year market data reveals a dénouement in streaming growth and a comparable wavering in vinyl sales for 2025.
The music industry is navigating a crucial period of recalibration, as both streaming consumption and physical sales in the UK and globally have experienced a slowdown. According to the British Phonographic Industry (BPI) and a new report from industry analysts MIDiA, this slowdown is influenced by several interrelated factors.
In the first half of 2025, streaming equivalent album (SEA) consumption in the UK grew by only around 6.4% year-on-year, down from about 11% growth in 2024. This single-digit growth is now becoming the norm rather than an exception. Globally, streaming growth has similarly slowed, shifting from the rapid expansion seen in earlier years to a more oscillating and moderate growth pattern.
A significant share (nearly 80%) of global subscriber growth is now coming from non-Western markets, with China emerging as the world's fourth largest recorded music market. This shift means Western markets, including the UK, face slower growth compared to previous years, as much of the new demand is concentrated in the "Global South."
Physical music sales, including vinyl, are also facing challenges. In the UK, physical sales have experienced a noticeable decline along with a wobble in vinyl sales, contributing to the overall slowdown in music consumption growth.
DSPs (like Spotify, Apple Music, YouTube, etc.) have gained increasing power and influence, altering licensing and revenue models. For example, “bundles” licensing discounts create pressure on label royalties, potentially limiting revenue growth for rightsholders.
Advertising-supported streaming revenue was flat globally in 2024, partly because advertisers prefer podcast inventory for better targeting rather than music. Even though some music videos now monetize better through premium services like YouTube Premium, ad-supported music streaming growth remains subdued compared to other content forms.
The rise of AI-generated music flooding streaming platforms adds a new disruptive factor. While some AI companies work ethically with rightsholders, many use a “do first, ask forgiveness later” approach, similar to past disruptive platforms.
Despite the near-term slowdown, the long-term outlook remains positive, with retail revenues expected to reach $110.8 billion by 2032 and label trade revenues expected to reach $58.2bn by 2032. However, the real concern is that vinyl growth can no longer be taken for granted.
In the UK, the music consumption market is experiencing a slowdown, with single-digit growth rates for streaming becoming the norm. The AES overall market results for the first half of 2025 compare with a 9.8% increase for the first six months of 2024. The decline in physical sales was primarily due to a 22.4% slump in CD sales in Q2, and the format is down 12.8% so far this year.
In the UK, Myles Smith secures two entries in the year-to-date Top 20 with "Nice To Meet You" (No.19, 505,924) and "Stargazing" (No.20, 476,805). Chrystal's "The Days" (Chaos/Polydor) is the only other UK artist in the Top 10, with 680,923 units. Tate McRae is just outside the Top 10 with "So Close To What," which finished at No.7 overall in Q2. Sam Fender's album "People Watching" (Polydor) is at No.3 overall (188,682 units), making it the biggest new release of 2025.
In terms of streaming consumption, Ed Sheeran is at No.2 with "+-=÷× (Tour Collection)" on 216,299 units. Lola Young's "Messy" (Island) is in second place with 996,063 units, but has total consumption of 1,174,749 when counting streaming for the track in 2024. Elton John's "Diamonds" (EMI/UMR) is at No.8 (152,094 units this year), and Charli XCX's "Brat" is at No.9 (143,827 units this year).
In Q2, vinyl sales were down by 2.8% year-on-year (1,532,884). Oasis had a strong result in Q2 with a No.5 finish for "Time Flies - 1994-2009" (Big Brother) on consumption of 74,001 in the quarter. Alex Warren's song "Ordinary" (Atlantic) is the biggest song of the first half of 2025 with consumption of 1,095,807. Sabrina Carpenter is on top overall for the half-year with "Short 'N Sweet" (Polydor) on 347,717 units.
As the music industry continues to evolve, it will be interesting to see how these trends develop and how industry stakeholders adapt to these changes.
- The decline in physical sales, including vinyl, presents a challenge for the music industry's business model, contributing to the overall slowdown in music consumption growth.
- Financing rooted in the entertainment sector, such as vinyl sales, may require reevaluation in the face of the stagnant growth experienced by streaming platforms and the declining sales of physical music.
