Booming digital services return entertainment retailing to growth
Fast growing digital services such as Spotify and Netflix helped entertainment retailing in 2013 deliver what is likely to have been its best result since 2009, according to figures released by the Entertainment Retailers Association.
The association’s preliminary year-end figures have revealed that digital video sales from services such as iTunes, Netflix and Lovefilm surged by 40.2% in 2013 to reach £621.4 million.
Overall, the UK music, video and games market was worth £5.4 billion in 2013, which was a 4% increase on 2012.
ERA director general Kim Bayley said: “This is a stunning result after at least five years of decline. Retailers have invested hundreds of millions of pounds in new digital services and these numbers suggest the public is responding in their droves. New technologies have historically presented challenges to the entertainment business, but these results show how our members are helping music, video and games companies find new markets.”
The ERA found that sales of videogames in the UK were up 6.6% overall in 2013 while video grew by 3.7%.
Although music sales declined 0.5%, music sales on streaming platforms such as Spotify, Deezer and O2 Tracks rose by 33.7% to £103 million.
Digital game sales, which covers mobile gaming as well as PC and console downloads, increased by 16.4% to £1.18 billion.
The best-performing physical formats in 2103 were Blu-ray video, with sales up 10% to £251.8 million, and vinyl albums whose sales more than doubled to £14.6 million.
Bayley added: “The big picture growth story in entertainment is clearly digital, but the success of Blu-ray and – most astonishingly vinyl – demonstrates that physical formats can still flourish when they are able to offer something distinctive.”
Videogames increased its lead as entertainment’s biggest sector during 2013 and now accounts for 41.4% of total entertainment sales.
Despite the huge growth in digital, the entertainment market is still predominantly a disc-based physical market with physical formats accounting for 56% of sales in 2013.
