ISBN 1-85765-702-0

Table of Contents

Executive Summary

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TABLE OF CONTENTS

Executive Summary

Market Definition

INTRODUCTION

MARKET SECTORS

MARKET POSITION

MARKET TRENDS

Market Size

THE TOTAL MARKET

BY MARKET SECTOR

A GLOBAL PERSPECTIVE

FOREIGN TRADE

Table 1: UK Retail and Trade Sales of Recorded Music by Value at Current Prices (£m at rsp, msp and percent), 1991-1996

Table 2: UK Trade Sales of Recorded Music by Volume (million units), 1991-1996

Table 3: UK Trade Sales of Recorded Music by Value at Current Prices (£m at msp), 1991-1996

Table 4: Volume and Value of UK Album Sales by Price Band ( percent), 1991-1996

Table 5: Volume of UK Album Sales by Price Band and Format (000 units), 1991-1996

Table 6: UK Exports of Recorded Music by Volume and Value (million units and £m), 1991-1996

Table 7: UK Imports of Recorded Music by Volume and Value (million units and £m), 1991-1996

Industry Background

RECENT HISTORY

INDUSTRY CONCENTRATION

DISTRIBUTION

PRODUCT LINES

BUSINESS UNITS

EMPLOYMENT

TRADE ASSOCIATIONS

Table 8: UK Stores Selling Recorded Music by Volume (number of stores), 1991, 1995 and 1996

Table 9: Volume Shares of UK Single Sales by Product Format and Genre ( percent), 1991, 1995 and 1996

Table 10: Volume Shares of UK Album Sales by Product Format and Genre ( percent), 1991, 1995 and 1996

Table 11: Volume Shares of UK Album Sales by Type ( percent), 1991, 1995 and 1996

Competitor Analysis

THE MARKETPLACE

MARKET LEADERS AND THEIR LABELS

ADVERTISING AND PROMOTION

BRANDING DEVELOPMENTS

Table 12: Total Advertising Expenditure on Recorded Music and Related Sectors (£000), 1995 and 1996

Table 13: Total Advertising Expenditure on Recorded Music Products by Record Company (£000), 1995 and 1996

Table 14: Top Ten Recorded Music Products by Advertising Expenditure (£000), 1996

Strengths, Weaknesses, Opportunities and Threats (SWOT)

STRENGTHS

WEAKNESSES

OPPORTUNITIES

THREATS

Buying Behaviour

CONSUMER PENETRATION

CONSUMER/RETAILER RELATIONSHIPS

Table 15: Penetration of Home Audio Systems ( percent of all adults), 1996

Table 16: Amount Spent on Home Audio Systems in the Last 12 Months by Price Band ( percent of all adults), 1996

Table 17: Penetration of Portable Audio Systems ( percent of all adults), 1996

Table 18: Amount Spent on Portable Audio Systems in the Last 12 Months ( percent of all adults), 1996

Table 19: Profile of Album Purchasers by Sex, Age and Social Grade ( percent), 1995

Table 20: Ownership and Purchase of Recorded Music Products ( percent of all adults), 1996

Table 21: Amount Spent on Recorded Music in the Last 12 Months ( percent of all adults), 1996

Table 22: Penetration of Mail Order Recorded Music Products by Sex, Age and Social Grade ( percent of all adults), 1996

Table 23: Retailer Shares of UK Recorded Music Volume Sales by Format ( percent), 1995

Table 24: Retailer Sales Profile by Genre ( percent of group sales), 1995

Outside Suppliers to the Industry

VERTICAL INTEGRATION

COMPACT DISC PRESSING PLANTS

Current Issues

THE DOMINANCE OF THE MAJOR SPECIALIST CHAINS

BANDS AS BRANDS

THE IMPACT OF THE CHARTS

PIRACY AND COUNTERFEITS

Table 25: UK Sales of Chart Albums by Value ( percent of all sales), 1991-1995

Forecasts

FORECASTS 1997 TO 2001

MARKET DEMAND

TECHNICAL DEVELOPMENTS

THE INTERNET

Table 26: Forecast UK Recorded Music Sales by Volume and Value at Constant 1997 Prices (million units and £m at rsp), 1997-2001

Company Profiles

INTRODUCTION

DEFINITIONS

FURTHER INFORMATION

Further Sources

ASSOCIATIONS

PERIODICALS

DIRECTORIES

GENERAL SOURCES

HBI UK INFORMATION SOURCES

GOVERNMENT PUBLICATIONS

OTHER SOURCES

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EXECUTIVE SUMMARY

In 1996, the UK market for prerecorded music products was estimated to be worth £1.81bn, at retailers' selling prices (rsp). This represents an increase in retail value of 7.1 percent, from the previous year's figure of £1.69bn. Over the same period, the volume of sales increased by 7.4 percent, from 266.9 million units to 286.6 million units. Between 1991 and 1996, the market showed a 42.7 percent increase in retail value, and a 44.2 percent increase in volume.

The compact disc (CD) format dominates the market, having accounted for 76.7 percent of all albums sold, by volume, in 1996. Sales of vinyl, both in the single and album formats, have declined sharply over the last 5 years. However, this process has taken longer in the UK than other European markets. Cassette tapes have settled at a stable volume, but as the rest of the market is growing rapidly, they are losing share.

Pop and rock are the dominant musical genres, with 69 percent of album sales in 1996. However, there are also significant segments in the market for dance, classical music, jazz, country, and spoken word products. However, growth and profitability in the market is dependent on the pop music market, where the albums which had achieved a top 40 chart placing accounted for 22.5 percent of album sales in 1995.

Sales of music products through non-traditional outlets, such as supermarkets and petrol station shops, are growing. Increasing concentration on a few successful recordings would be detrimental to the breadth of choice in the industry as a whole, as would the establishment of deep discounting on the US model.

The Internet offers new opportunities for both established record companies and new independent labels to offer access to their products. As yet, however, domestic Internet penetration in the UK is at a very low level, but it is likely that it will begin to have significant impact on CD and tape sales in the next 5 years.

However, despite encroachments from new technology, the album market is expected to show average annual growth in volume of 7.2 percent, and in value of 6.7 percent between 1997 and the year 2001. Over the same period, however, singles are set to decline; showing an average annual fall in volume of 5.9 percent, and an average annual value drop of 8.4 percent. This decline will not have a deep effect on the value of the recorded music as a whole, due to the low unit cost of singles.

Text © 1997 Key Note

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