Music industry in a spin as rock stars shun stadium gigs

CD sales fell by 7.9 per cent in 2010 while revenues from live music declined by 6.8 per cent after a decade of growth

Rockers who downsized concerts due to the recession and a lack of new stars are to blame for a £189m slump in UK music revenues, a report has found.

The value of the UK music industry declined 4.8 per cent to £3.8bn last year, according to the annual report by music royalties body PRS For Music.

The survey, which combines CD and download sales, revenues from live music, and publishing and music licensing income, is the most comprehensive snapshot of the UK industry.

A 7.9 per cent fall in CD sales to £1.24bn was blamed on digital piracy and a dearth of big name releases. Hopes that increasing revenues from live music and legal digital services such as Spotify would replace that lost income look misplaced, it said.

Revenues from UK digital services rose nearly 20 per cent to £316.5m. But the report warned: "Global digital revenues are not going to be the '$30bn dollar baby' people talked about five years ago. Indeed they may stabilise at around $5bn over the medium term." After a decade of growth, live music revenues declined by 6.8 per cent to £1.48bn. The report said: "In 2010, a number of stadium and arena-filling bands were not on tour (Rolling Stones, Coldplay, Take That) and many of those that did tour opted to play smaller venues in order to limit their risk (Kings of Leon and Rod Stewart played arenas rather than stadiums). This risk-averse behaviour is rational in the current economic climate." The report also cited European festivals, such as Benicassim in Spain, which lure British fans abroad and the extended domestic outdoor season, which now lasts from May to October.

"There is a plausible argument that this is now crowding out the conventional touring calendar for emerging bands, with some fans saying: 'Why would I pay £30 to see you in spring, when I've already spent £200 to see you in the summer?'"

Breakthrough acts, defined as artists who pass 100,000 album sales for the first time, hit a new low in 2010 with only 17 achieving this, compared with an average of 25 in recent years.

The report warned: "The success of Adele is as welcome as it is worrying, as this 23-year-old artist was responsible for almost 10 per cent of all artist albums sold in the first four months of the year. While her feats at home and abroad are worth celebrating, what's worrying is the performance of the rest of the market." The industry's future will depend on singers who are attractive to advertisers and sponsors, with the potential to market their own clothing range and who can get their songs licensed to film and computer game soundtracks, the report said. It praised artists who sell merchandise and music directly to fans via the web.

Four figures behind the slump

Adele Her global No 1, with 8 million sales, of the album 21 is covering up a dearth of breakthrough British acts. Adele refuses to headline festivals and stadiums, despite multimillion-pound offers.

Rod Stewart The veteran rocker, 66, contributed to the decline in revenues by playing seven indoor arena shows last year at £70 a ticket, instead of filling stadiums. He took his show back outdoors this summer, however.

Susan Boyle The success of the talent show star's debut album boosted CD sales in 2009 but her impact is now in "accelerated decline" with revenues from downloads not making up the shortfall.

Vince Power Over-saturated festival season is killing bands' ticket sales for their own tours. Fans travel to Power's Benicassim festival in Spain to see the best British bands.

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