Digital Dominates U.K. Entertainment Sales

LONDON: For the first time ever, digital sales for video have surpassed physical formats in the U.K., with revenues from downloads and subscription services now exceeding those of DVD and Blu-ray discs.

According to new figures from the Entertainment Retailers Association (ERA), booming digital services helped the music, video and games markets achieve new all-time record sales of £6.3 billion ($7.8 billion) in 2016, up 3 percent on the previous year and around £1 billion ($1.2 billion) more than they were as recently as 2012.

The video market became a majority (58 percent) digital business in 2016. Sales figures for physical video formats were down 16.9 percent for retail and 21.2 percent for rental. Digital sales saw a lift of 22.8 percent, though, reaching £1.3 billion ($1.6 billion). This contributed to an overall 2.2-percent gain for video’s entertainment sales year on year, thanks to the likes of Netflix, Sky, Amazon and Apple.

ERA CEO Kim Bayley said, “The music, video and games industries were understandably nervous about the advent of new digital services, but these figures provide resounding evidence of the benefits of our members’ investment in innovation. To have added over £1 billion in new revenues in just four years is an incredible achievement. To put it another way, take away today’s digital services and the entertainment market would be barely a third the size it is today.”

“Physical entertainment retailing is clearly off its peak,” added Bayley, “but it is still a £2.2 billion 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.”