Tom Keighley

Digital entertainment sales pass £1bn, despite industry decline

Digital sales of music, video and games have exceeded £1bn for the first time in 2012, the Entertainment Retailers Association (ERA) say.

Sales grew 11.4% over 2011 to account for a quarter of the combined entertainment market, however the market as a whole suffered decline.

The official end-of-year figures comprise data from the Official Charts Company; GfK Chart-Track data and IHS Screen Digest estimates.

ERA director general Kim Bayley said, “Breaching the £1bn barrier is an incredible achievement for the UK’s digital entertainment retailers and reflects their huge investment in new and innovative services which means you can buy music, video and games literally at any time of the day and wherever you are.”

Physical sales of CDs, DVDs, Blu-ray and videogames still account for just over three quarters of the market. CDs sales suffered the biggest fall of 14.9%, followed by DVD and Blu-ray, which fell 11.4%.

Bayley added: “At the same time I suspect that many people will be surprised to learn just how resilient the physical business still is - with three quarters of entertainment sales still on disc. Downloads offer convenience and portability, but people still seem to value the quality and tangibility of a physical product.

“The combination of a myriad of exciting new devices and compelling new digital retailing services is clearly exciting consumers. What is most striking is that these figures do not even include the impact of streaming services like Spotify, Deezer, We7 and Rdio, for whom full market value data is not yet available.

“Despite digital’s seemingly inexorable growth, the CD, the DVD and the physical games disc show incredible resilience. It is nearly nine years since iTunes launched in the UK yet over 60% of music sales are still accounted for by physical formats. It is clearly way too soon to write off the CD and in video, digital barely gets a look in. Physical formats still account for three quarters of the entertainment market.”

The ERA suggest some of the overall decline in the market was attributable to video and games suppliers not releasing summer titles to avoid the Olympics.

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