CD sales rally after years of decline in UK

SALES of CDs in the UK last year confounded expectations by flattening out after years of decline due to the runaway success of TV-driven acts like Susan Boyle and JLS, according to an influential music industry analyst.

But sales of tickets and T-shirts remained the big driver of income for bands. Live performance, particularly at music festivals, outpaced CD sales for the second year in a row for both famous and up-and-coming bands, according to Will Page, chief economist for the Performing Right Society (PRS).

He claimed that "the rot has come to a stop" when it comes to CD sales in the UK, although other countries such as the US, Canada and Spain are still experiencing declines.

The good news for the UK music industry came as the government passed the controversial Digital Economy Bill into law, which will see the introduction of measures blocking the illegal downloading of music and films. The commercial music industry body, UK Music, estimates that 63 per cent of 14 to 20-year-olds regularly poach online music.

Page argued that the success of free but legal online music streaming sites, as well as the persistence of speciality music retailers on the UK high street, played a factor in the fight against illegal downloads and support for buying CDs.

He said sales by acts such as the 2008 X Factor runners-up JLS were "absolutely insane".

"You wouldn't have given that band (sales of] 200,000 two years ago. Perhaps parents are buying it for their kids," Page said. "Whatever it is, you cannot carry on with the Armageddon, Apocalypse Now, we're-all-dead scenarios in the music business."

Page, who spoke at last week's music industry forum in Edinburgh, Wide Days, said the figures would lead to new investment in the development of existing or up-and-coming bands and songwriters.

He said record labels – which have traditionally supported the development of artists – will begin investing again. But he also pointed out that live music promoters – such as the HMV-owned Mama Group, which owns the Hammersmith Apollo in London and the Edinburgh Picture House – will rival music labels investing in artist development as well as private equity firms.

"If live is overtaking recorded and promoters don't have acts coming through the conveyor belt then we need promoters to start investing in new talent today," said Page. "I think there is an appetite, and there are a lot of new players coming to the market."

Despite the first signs of positive news since the peak of CD sales in 2002/3, Page believes Scottish music is suffering a "market failure" as labels seeking new talent refuse to send representatives outside of London. Although he said Scotland "punches above its weight" in terms of musical talent, with acts like KT Tunstall and Franz Ferdinand finding success, he called for government to support music acts to perform in London and abroad.

"State intervention needs to come to get those bands out to global markets," he said. "For Scotland to keep punching above its weight, you are going to need exposure, which means you are going to have to export your talent outside of Scotland."

A spokesperson for Scottish Enterprise said the music industry was "vital" to Scotland and that it will "work closely" to provide support for the industry with the soon-to-be-launched governing body, Creative Scotland.