ERA: Digital services deliver £1bn boost to music, video and games
The Entertainment Retailers Association (ERA) has compiled and released preliminary sales figures for music, video and games for 2016 and one thing is clear: digital services have put sales in these areas at an all-time high, up £1bn from four years ago.
Video: digital overtakes physical for the first time
According to the ERA’s press release, “For the first time in 2016 the video market became a majority (58%) digital business with revenues from downloads and subscription services now exceeding those of DVD and Blu-ray discs.” Video streaming platforms such as Netflix, Amazon and Apple saw digital video revenues increase by 22.8%.
Music: entertainment’s fastest-growing sector
The popularity of streaming services made the music industry the fast growing entertainment sector, thanks to a 65% rise in music subscription revenues driven by Spotify, Apple Music, Amazon and Deezer.
Despite digital services accounting for 57% of music revenues, downloads suffered in 2016, decreasing by more than 20%. CD sales also waned.
Games: Digital has the lion’s share of revenue
The games industry saw the least increase in revenue. Even though digital revenues increased, physical games sales declined, except for physical handheld games, which saw a revenue increase of 21.3%.
Physical remains a £2.2bn business, despite decline
In addition to a decline in physical video games, CD, DVD and Blu-ray suffered a decrease in revenues. The other exception was vinyl records, which saw a staggering 56.4% increase.
“Physical entertainment retailing is clearly off its peak,” said ERA CEO Kim Bayley, “but it is still a £2.2bn market. The growth of vinyl in particular shows that physical formats can flourish if they offer distinctive benefits. The strength of the DVD and CD formats over the Christmas period shows that physical still dominates when it comes to gifting, for instance.”
But she stressed digital’s dominance and its importance in the continued growth of these sectors. “Take away today’s digital services and the entertainment market would be barely a third the size it is today,” she said.
About the research
The ERA’s market figures are aggregated data from respected market analysts including the Official Charts Company, GfK and IHS. Preliminary numbers will be updated and confirmed with the publication of the ERA Yearbook in March 2016.
ERA is the trade association representing the vast majority of retailers and digital services offering music, video and games. Its members range from independent record shops (Reflex, Sister Ray) to digital services (Spotify, Sky, Deezer, 7digital) to internet retailers (Amazon) to specialist High Street operators (HMV, Game) and supermarkets (Tesco, Sainsburys, Asda, Morrisons).
Read the full press release here.