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Digital music revenue exceeds physical formats in the UK as streaming services grow

For the first time ever, digital music downloads and streaming revenues have exceeded those of physical formats in the UK.

According to the British Phonographic Industry (BPI), revenue of digital music overtook physical formats for the first time between January and April of this year, accounting for 55.5% of U.K. music revenue .

Digital income from all sources including à la carte, subscription and ad-supported services grew by 23.6% in Q1 to £86.5m, while revenue from physical formats like CD and lovely, lovely vinyl fell by 15.1% to £69.3m.

Digital album downloads help set the music industry tills a-ringing, with sales increasing by 22.7% to £35.9 million, while paid-for subscription services revenue almost doubled over the same period a year ago, increasing 93% to nearly £9 million, while ad-supported digital services such as Spotify and We7 managed to attract revenues of £3.4m, an increase of 20% on Q1 2011.

Here’s the full press release from the British Phonographic Industry:

Digital Revenues Overtake Physical in UK Recorded Music Market, 31 May 2012

• Digital accounted for 55.5% of UK trade revenues in Q1 2012 – overtaking physical for first time
• Year-on-year record industry revenues grow by 2.7% to £155.8m in Q1 2012

A diversified revenue base and strong growth in a la carte albums sales and paid subscriptions meant digital music represented the majority of record industry revenues for the first time during Q1, 2012, new figures revealed today by the BPI confirmed.

Digital music revenues accounted for 55.5% of record industry revenues in the first quarter of the year. Impressive growth in digital music revenues boosted the record industry’s overall market value by 2.7% to £155.8m, offsetting a decline in revenues from physical products.

Digital income from all sources including à la carte, subscription and ad-supported services grew year on year by almost a quarter (23.6%) in Q1 to £86.5m. By contrast, revenue from physical formats fell by 15.1% to £69.3m.

Sales of digital albums contributed substantially to rising digital revenues, with the format’s sales increasing by 22.7% to £35.9m, outstripping revenues from downloads of single tracks for a second successive quarter.

Paid-for subscription services also performed strongly with income almost doubling (93%) year-on-year to just under £9 million as users migrate to premium, paid-for tiers. The ad-supported tiers of digital services such as Spotify and We7 raked in revenues of £3.4m, an increase of 20% on Q1 2011.