U.K. Digital Video Sales Surged by 40 Percent in 2013

LONDON: Digital video sales in the U.K. were up by 40 percent in 2013, according to year-end figures from the Entertainment Retail Association (ERA), driven by services such as iTunes, Netflix and LOVEFiLM.

Digital video sales grew by 40.2 percent in 2013, to £621.4 million.

Overall, the entertainment retail market improved for the first time in five years. The market value increased 4 percent to £5.4 billion in 2013, compared to £5.1 billion the year prior. The improvement was largely attributed to the fast-growing digital services Spotify, Netflix and Steam.

Kim Bayley, ERA's director general, 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."

Preliminary figures suggest video enjoyed its first growth since 2008 in 2013, thanks to digital. Sales of physical formats declined 6.8 percent to £1.44 billion, but digital sales value grew by 40 percent to £621 million, reflecting the rapid growth of streaming services like Netflix, LOVEFiLM and Blinkbox.

The biggest-selling video of the year was Skyfall, which sold 2.96 million units' worth.

Bayley said, "Video has done well to maintain its physical presence while enjoying strong digital growth. The challenge for video companies in 2014 will be to establish attractive physical formats which offer digital copies which enable them to hang on to valuable store space."