UK Albums Have a Record Year in 2003 (yet the U.S. is moribund; Why?)


Here’s an interesting little factoid you may not have noticed: In 2003, the number of artist albums sold in the UK in 2003 rose more than 7% to almost 121 million.

The UK music industry magazine “Music Week” shows artist albums – and that excludes compilation albums – sold 120,968,891 in 2003.

That total is a rise of 7.6% from the previous year, according to the BBC.

Which raises a question: Why are CD sales in the UK doing so well, while the U.S. music industry has seen continual erosion of music sales since the late 90s?

Here are the 3 key differences between the U.S. and U.K. music industries:

Radio concentration: The UK does not have the same degree of ownership concentration that is in the U.S. There is no dominant player like ClearChannel Communications in Great Britain;

Stronger Economy: The U.K. did not suffer the same degree of post bubble effects as did the U.S. Indeed, the British Pound is up dramatically against the U.S. Dollar. They simply did not have nearly as severe a downturn. Hence, their consumers did not cut back on purchases the way we did in the States;

More Creative Musical Environment: Call it a lack of “insipid boy bands.” The British have always had a terrficially vibrant musical scene: From Beatlemania to the British Invasion to the Clash and the punk sound, the British Isles have produced as vastly disproportionate amount of great music relative to their size and population. And, with a much lower ownership concentration of radio stations, which must compete with an extensive public broadcasting system (the Beeb), there is a rich and diverse set of offerings over the public airwaves;

The bottom line is that the U.S. music market is suffering from infrastruture issues which are negatively impacting record sales. Some of it is broader macro economic factors; Parts are legislatively based — allowing ever increasing concentration of radio station ownership reduces the amount of music which gets heard by the CD buying population.

Some if it is just those goddamned insipid boy bands . . .

Albums have a record year in 2003
By Stephen Dowling
BBC News, Wednesday, 14 January, 2004, 13:06 GMT

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  1. Gabriel commented on Feb 21

    It may also be because the UK’s lower access to broadband/ unmetered internet access means that file-sharing isn’t affecting the UK sales as badly as in the US (yet). About the most creative band in the UK top 20 this week is … the Strokes.

  2. Barry Ritholtz commented on Feb 21

    Gabriel hits upon a very interesting subject — the top 20 list.

    But before we address that, let’s consider the UK’s internet structure — you have a fairly rich broadband build out, and a full host of file sharing traffic.

    In fact, a key the difference between US & UK low speed dial up is that, unlike the U.S., your phone rates are not usually unlimited local access, where as that is the rule in the USA. That makes the price differential between Broadband and Dial up less significant, once local toll calls are factored in. (That was a huge advantage for AOL in the U.S.).

    As to file sharing, my personal experience is that it drives sales (I download stuff, if i like it, I order the CD). I personally believe that MP3s are advertisements for the songs/CDs they represent. They are more akin to radio play/MTV play than a sale of a CD.

    But consider the difference between US & UK radio. Clear Channel communications are the largest holder of radio station licenses. They have supplanted local ownership / programming the way Home Depot has crushed Mom & Pop hardware stores in the U.S. The difference is, hardware stores do not reflect local taste in hammers and saws the way local radio stations do.

    Radio is a key difference. Plus, there is a lot more experimentation coming from the BBC.

    That’s why the top 20 list is so emblematic of the music industry’s problems. Their model is based upon mega-hits. That is a mistake in my opnion. Instead, they need to focus not on having 20 megabands selling millions of CDs each, but rather 1000s of bands selling 100,000 CDs a piece.

    That represents a sea change for the industry, and I do not know if they are that innovative, creative, far sighted or intelligent to pursue that model.

  3. Josh commented on Feb 21


    This is a bit off the current topic, but does relate to an earlier post of yours about falling money supply. I had seen that money supply had rebounded recently and had accepted it as such, until I saw today’s letter from John Maudlin, . He takes the following from I thought it was very interesting and so may you and your readers:

    “What’s more, advised Dr. Hunt, don’t breathe easy because M3 rebounded in January, apparently growing at close to an 11% annual rate-because an accounting change (FASB’s FIN 46, which basically makes banks consolidate the assets and liabilities of special purpose entities) is messing up the comparability of the money supply stats. It’s not something the Fed has been advertising, Dr. Hunt says. He had to notice a footnote in the stats, and Ried Thunberg’s Bill Jordan had to chase down Fed officials for a clarification of some muddy reporting, but when all is said and done, this pair of gimlet-eyed Fed watchers reports that rather than rebounding sharply in January, M3 was essentially flat, or maybe up 1%. Not a bullish portent.”

    Obviously, I am not wise enough to vouch for its veracity, but if true, I think it says a lot.

  4. John commented on Oct 7

    I know this is a late post but regarding the recent announcement of the BPI that they are now targeting major uploaders and are taking legal action against 28 individuals for this I wanted to have a wee rant.
    I am personally all for file sharing and agree with the chap who posted above that he downloads and still buys.

    With the UK recording business sales rising in 2003 and I beleive that they will still rise before the end of this year how can they say that file sharing effects the business.

    I may not be totally clued up on the whole thing but I do beleive that this is being blown out of proportion. People record things from TV and even radio shows and this is also a breach of copyright. The majority of recording artists themselves probably support file sharing as it has their music reaching a totally different audience ( Some even make their albums available to download over the net) than if it was not available on the internet. This in turn would help the music industry sales as most people who download also buy the albums.

    I am old enough to remember the furore when magnetic tapes became the way of sharing music and that did not stop the music industries making money and file sharing will NOT stop these industries making money also.

    I may be rambling here but this is getting on my nerves.


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