PRS for Music, the organisation that represents 75,000 songwriters, composers and music publishers in the UK, said that a surge in growth in revenue from digital services and international markets helped more than offset a double-digit fall in royalties collected from the sale of CDs.
Online royalties soared 45.3% year on year last year, although the total remains relatively small at £38.5m. By contrast, recorded media royalites – payments stemming from CD sales – tumbled 13.3% to £101.6m in 2011, a steeper decline than 2010's 8.8% fall.
The royalty figure gives one of the best indications for the overall state of the UK music market, because songwriters are paid whenever a tune is played or performed – making it possible to compare income derived from CD sales, Spotify and other online services, and live events.
Robert Ashcroft, the chief executive of PRS for Music, said legal, royalty-paying digital music services were gaining ground in the battle against piracy – in the light of successful legal actions against sites such as MegaUpload, Newzbin2 and The Pirate Bay.
However, Ashcroft said that nurturing the still fledgling digital music market was a "work in progress". Growth in royalties from legal digital services had slowed to 4.3% year on year in 2010, before this year's 45.3% uplift.
Royalties collected from the use of UK music overseas grew by 10.6% year on year to £187.7m, thanks to the popularity of acts including Adele, Coldplay, Tinie Tempah, Muse and Plan B.
Income from live UK performances, including festivals and stadium gigs, grew 8.2% year on year to £22.5m primarily thanks to the huge success of Take That's Progress tour. Royalties from music used in pubs, clubs, shops and offices – referred to as "public performance" by PRS – grew just 0.9% to £131.4m.
Broadcast royalties, derived from music played on the radio as well as used in TV shows, grew a modest 1.2% to £149m. Within that, TV revenues rose 5.7% year on year to £101.6m, while radio royalties fell 5.4% to £46.8m.
Ashcroft said that music is an "essential" element of TV shows, pointing to the sometimes overlooked importance of music to programmes such as the most recent series of Sherlock and MasterChef.
