Let’s celebrate entertainment retail’s return to form

Friday 28th July 2017

Entertainment retailing’s amazing turnaround came after it learned to stop bemoaning things it couldn’t change and instead took control of its own destiny, writes ERA CEO Kim Bayley. Is there a lesson in this for music, video and games companies?


Farmers are notorious for their ability to bemoan the business outlook. If there isn’t a drought, there’s a flood. If it’s not too hot, it’s too cold. If you were unkind, you might say that they’re moaners.

A kinder explanation is that if your fortunes are reliant on a capricious and unpredictable and immoveable force, in farmers’ case the weather, then it’s no surprise you might have a jaundiced view of the future.

It’s not so long ago that entertainment retailers could be regarded as the farmers of the entertainment industry. There was a lot to complain about.

In their case you might say the capricious and unpredictable and immoveable force was the content industry.

If they weren’t starving you of releases for most of the year in order to take account of the Christmas bounce, they would be arbitrarily changing release dates. If they weren’t embedding security features which were incompatible with the system you’d spent thousands on, they’d be licensing full-length albums or movies to national newspapers for cover mounts.

No wonder ERA meetings just a few years ago often took a negative turn. Our public statements were sometimes reactive. Often we did not react positively.

Oh, how things have changed…

I was sat in a meeting of ERA’s Executive Board the last week when it occurred to me: the room was full of positivity – and that includes our physical retailers. The atmosphere was constructive, collaborative and as ever with retailers, pragmatically commercial.

So what changed? To put it simply, I believe that the pressures of structural change demonstrated to retailers of all kinds that waiting for someone else – their suppliers – to save them was never going to work.

They have taken their fate into their own hands and in almost every case it has worked.

The most obvious example is digital services. ERA this week announced the entertainment market grew by 6.4% in the first half of 2017. The market has now enjoyed four years of continuous growth. Digital services have invested and innovated to deliver real growth after 10 years of decline.

Supermarkets have responded to declining sales by expanding distribution into thousands of small express and convenience outlets. Meanwhile specialists have doubled down on their key attribute – their specialist product and market knowledge – and have seen the benefits.

Even independent record shops, once regarded as a doomed species, have prospered due to their insight in identifying first residual and then growing demand for vinyl and then banding together under the Record Store Day banner to promote the sector as a whole.

With success naturally comes confidence, and in my 15 years with ERA, I have never seen such confidence among ERA’s members. They are doing a good job and they know it.

What is curious is that the more successful retailers and digital services have become, the louder the voices of criticism against them. Whether it be the relentless campaign against the “value gap”, criticism of payment levels by streaming services (“only 70%!”), the pillorying of streaming services for distribution practices which are controlled by record companies and collection societies or recent outrage about “fake streams” or “fake artists”, you could be forgiven for thinking that ERA’s members are set on destroying the entertainment industry, rather than taking it to new heights.

In fact it is all beginning to resemble the kind of knee-jerk negativity that was once arguably the preserve of retailers themselves.

As a representative of a sector which has been through this all before, I would humbly suggest the following to all the farmers out there: it’s pointless raging at the weather. Better to focus on what you can do; to work your natural strengths; to cut your costs, modernise your working practices and above all to work with reality rather than bemoaning it.

It took a while for the penny to drop, but ERA’s members learned a hard lesson through the dark days of the early 2000s: collaboration is a far better recipe for success than conflict.




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