He then quoted Kim Bayley, CEO of the UK Electrical and Radio Association, concerning digital audio and ‘generation rent’:
“This is a significant moment. For the first time since the birth of the modern entertainment business in the late 1950s, more revenue is coming from payments to 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.”
Nick Simon of GFK.com, the market research experts, presented his customary annual distillation of the progress of the UK audio economy, noting weakening consumer confidence and largely static sales at £800 million, if somewhat declining in some sectors. He studiously avoided use of that ‘B’ word to help explain the market malaise.
GDP is close to static, inflation is more or less tracking earnings, the exchange rate has fallen and is now stable at the new low, but unemployment, thankfully, is also stable. Imports do cost more, including audio.
The Black Friday and similar Christmas sales promotions did little to ignite the consumer electronics market this past year, indeed year on year growth has been static.
Some figures cause concern, Black Friday sales down 3.4% by value even with an 11.3% average sales price cut. XMAS and Boxing Day was even worse, unit and value sales were down 12%. There were winners and losers, traditional audio and radio sales down around 25%, but voice operated (particularly) and also sound bar loudspeakers were up 50%, also headphones and smart phone related audio devices did well, with headphones up another 50%.
Sadly for some, while the previous year enjoyed a continuing rise in turntable sales, last year this market actually declined nearly 32%. (mostly for low cost all –in- ones) with the latest figures for January 2019 show a further decline of over 2% by value, suggesting that uncertainty is really biting the UK consumer.
Note that figures can mislead, and while turntables are weakening, sales are still five times what they were in 2013, and still constitute three times in monetary value what they were then.
Top selling vinyl LP was mainly legacy, e.g. Arctic Monkeys ‘Tranquillity Base’with ‘Greatest Hits’from Queen, also Fleetwood Mac ‘Rumours’, Nirvana ‘Oasis’, plus Amy Winehouse ‘Back to Black’ and Pink Floyd ‘Dark Side of the Moon.’Plus a lone contemporary LP spinner, George Ezra’s ‘Staying at Tamara’s’.
The audio market as a whole is still dominated by Soundbar, Bluetooth and Smart speakers while larger home theatre systems are still in steady decline.
By value the audio market is not growing: CD players are also in slow decline though loudspeaker separates grew just a little, from £54 to £57 million turnover, for the past year.
Voice activation, as has been predicted, is the driving force in wireless audio loudspeakers, and sales of those devices without the feature are either steady or declining.
Laurence Harrison of Digital Radio UKbriefed us on the state of play for audio as a whole, explaining that live radio still dominates audio listening, with a 75% audience share.
On-demand music follows with 10%. Digital tracks are 7% while ‘CD’ listening is 3%, as are podcasts at 3%. Cassette and vinyl each account for just 1%. These figures also show how small the Hi Fi separates market actually is.
He noted that the number of UK DAB radio stations was now over 600, with many of them small scale operations. (A few examples below.)
FM still dominates with 65% of the radio listening market. AM for cars is being phased out due to now unacceptable levels of interference, while DAB is just reaching profitability.