At the AGM, at which the results of the ballot for the board directors were revealed, taking their place on the board for 2018 are: Tom Barron (PMC); Andy Clough (Haymarket); Geoff Coleman (Acoustica); Elizabeth Gould (Martins Hi-Fi); Phil Hansen (Red Sheep Communications); Adam Lee (Bowers & Wilkins); Geoff Mathews (Soundcraft Hi-Fi) and Simon Talbot (Bartletts HiFi). The past chairman, Laurence Armstrong (Henley Audio), remains on the board in an ex-officio capacity and Tom Barron remains as chairman for 2018.
We enjoyed an impressive demonstration of Dolby Cinema showing the market evolution of the Atmos dimensional sound format including its recent arrival on SKY, here presented by Matt Desborough of Dolby.
We benefitted from the first appearance of the BPI (British Phonographic Industry) at the event represented by Gennaro Castaldo and Chris Green. They presented an overview of the changing trends in music consumption in the UK. The ongoing shift to streaming, now 52% of all music sales, saw yet another year on year decline in CD sales (-12%). Conversely the 27% rise in vinyl sales over the year is having an obvious impact on the hi-fi industry and the products it sells.
Clarity has begun working with the BPI to cooperate on areas of mutual interest, given that the software and hardware markets are inextricably linked. Music consumption in the UK rose nearly 10% with streaming now leading, up some 52%. Streaming has grown from 90m sales units just 5 years ago to 1.5 billion, and is still growing fast now accounting for 50% of the market by value. The rise if the smart speaker, for example equipped with Alexa and the like, is massively driving sales of streamed music. Conversely downloads (to store and keep) fell 20%, and CD sales continued to fall, down 12% over the past year. However vinyl sales are still growing in the UK , now at 4 million units per annum. Given the higher unit price of vinyl, typically £20, it now represents a quarter of the CD market by value
Highlighting these statistics from the BPI, which represents over 400 independent, and three major record labels, and is responsible for the BRIT Awards, there was further fascinating data from the annual state of industry presentation given by Nick Simon of GfK. Total sales of audio equipment have shifted away from traditional separates over the past few years, here treated as ‘home theatre systems and loudspeakers’, and which accounted for over 50% of the market in 2012. It is moving to soundbars, Bluetooth speakers and network audio systems. The latter three sections accounted for 62% of the market for 2017.
However, within their niche categories, sales of traditional audio separates have remained resilient, also with the turntable revival still showing strong performance, albeit slightly down on last year – this blip referred to as a ‘market correction’ by GfK. Looking to the future, both the BPI and GfK predict very strong growth in the sales of smart speakers as consumers switch to voice assistant equipped convenience solutions.
Over the past year there was modest growth in overall consumer electronics sales, dominated by wireless and smart audio loudspeakers units. We were to hear later that warehouse specialist Amazon had, almost overnight, become the worlds largest loudspeaker manufacturer, this on the back of those Alexa equipped wireless units, which are also loudspeaker equipped music players.
UK headphone sales continue to rise, up 25% , especially Bluetooth cordless, to 10M units. However set top boxes, Blu-Ray, DVD, sound bars and home audio systems of a general nature all fell over the year, average loss of about 15% by value, while the Home theatre market remained moribund. The HiFi separates market is now worth about £39M, treading water.
On radio the installed digital base is approaching the 50% threshold for the government threatened switchover to all-digital from the present dual transmission of national broadcasting, perhaps FM receivers obsolete from about 2020 based on present government statements.
The conference welcomed back Peter Aylett, a HIFICRITIC contributor, with his thought provoking and popular CES Technology Trends presentation. Artificial Intelligence and smart products were the focus of much of the new technology unveiled at CES and Peter helped the audience get a perspective on what AI is, how the smart city and smart products may evolve, and what benefits that they may bring to consumers over the coming years. Peter felt that interoperability between the many producers was to become key also that their ability to monitor us benignly had important benefits for health and security.
Based on what he saw at CES he noted that if we thought that video panel performance had peaked with 4K, based on the evidence there was huge progress yet to be made with displays.
Commenting on the coming year Tom Barron observed, “We believe one of the most useful functions we can provide as a trade association is to centralise training for the industry. Based on the premise that ‘people buy from people, not companies’, we will be working hard over the next few months to put together modern and relevant training programmes that will equip our members with the most up to date thinking regarding the sales of goods and services to discerning consumers.” He concludes, “We are looking forward to working with our members and industry colleagues during 2018 to help strengthen the hi-fi sector in the UK and bring quality audio experiences to more people.”