In a week that saw the UK Government rule out blocking pirate websites, new figures show that the UK music industry dropped almost £190m in revenue in 2010.

This figure is across the board, and includes record sales, streaming, downloads and live performances. Total revenue across the music industry last year was £3.8bn, down 4.8% on 2009.

It’s thought that a big contributory factor in the drop was curtailed consumer spending in light of the recent financial downturn, which not only meant a drop in music sales, but also top artist were less willing to launch large tours in case they couldn’t fill the venues. Indeed, revenues from live music in particular fell by almost 7% to £1.48bn in 2010.

PRS for Music, the UK’s music royalties body, told the Guardian:

“A number of stadium- and arena-filling bands were not on tour and many of those that did tour opted to play smaller venues to limit their risk (Kings of Leon and Rod Stewart).”

Similarly, CD sales dropped  by almost 8% to £1.24bn, with a combination of music piracy, digital downloads and streaming continuing to affect the sale of physical format music.

In more positive news, revenue from digital music grew by almost a fifth in 2010, hitting almost £320m last year. But the report also indicated that the full promise of digital music consumption has been overstated, noting:

“While steep falls in physical revenues continued apace in 2010, there were clear signs that growth in digital revenues slowed across the main international recorded music industry markets. Put more bluntly, global digital revenues are not going to be the ‘$30bn baby’ people talked about five years ago. Indeed they may stabilise at around $5bn.”

Spotify recently announced a partnership deal with Virgin Media, which should see its service hit many more music fans shortly. And yesterday, we reported that a similar music-streaming service called Deezer is set to launch in the UK in the next few weeks.

With access to digital music – including streaming and downloads – continuing to grow, the state of the music industry in the UK may not be as bad as some figures suggest. Of course, it’s unlikely to regain the sorts of revenue that it did prior to the digital music revolution, but it seems that people are still spending a lot of money on music.