DIGITAL SERVICES DELIVER £1bn BOOST
TO THE MUSIC, VIDEO AND GAMES BUSINESSES
2016 SALES REACH ALL-TIME HIGH OF £6.3bn
Video - majority digital for the first time
Music - entertainment’s fastest growing sector
Games - now three-quarters digital
5 January 2017: Investment by new digital services like Spotify, Sky, Amazon, Apple Music and Google has resulted in sales of music, video and games running £1bn ahead of where they were just four years ago, according to data compiled by the Entertainment Retailers Association (ERA).
Preliminary figures from ERA indicate that booming digital services helped the music, video and games markets achieve new all-time record sales of £6.3bn in 2016, up 3% on the previous year – and over £1bn more than they were as recently as 2012.
That 3% growth is even more remarkable since it comes in comparison with 2015, which was a 53-week year.
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.
Digital services account for 57% of music revenues and 74% of the games market.
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 £1bn 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.”
ERA’s market figures provide a definitive overview of the UK entertainment market, aggregating 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.
Physical remains a £2.2bn business
Physical formats of music, video and games product declined by 15% in aggregate in 2016, but some physical formats continue to flourish. Sales of handheld games software grew 21.3% to £48.8m, while vinyl records continued their sustained revival, up 56.4% to £65.6m.
“Physical entertainment retailing is clearly off its peak,” said 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.”
|
ERA PRELIMINARY ENTERTAINMENT SALES 2016 (£m) |
||||
|
|
|
2015 |
2016 |
% change |
|
Music |
Physical |
£512.8 |
£475.4 |
-7.3% |
|
|
Downloads |
£293.4 |
£214.6 |
-26.8% |
|
|
Streaming |
£253.5 |
£418.5 |
65.1% |
|
|
Total Music |
£1,059.6 |
£1,108.5 |
4.6% |
|
|
|
|
|
|
|
Video |
Physical Retail |
£1,075.4 |
£893.6 |
-16.9% |
|
|
Physical Rental |
£62.5 |
£49.3 |
-21.2% |
|
|
Digital |
£1,065.9 |
£1,309.3 |
22.8% |
|
|
Total Video |
£2,203.8 |
£2,252.2 |
2.2% |
|
|
|
|
|
|
|
Games |
Physical |
£927.7 |
£776.0 |
-16.4% |
|
|
Digital |
£1,945.3 |
£2,181.2 |
12.1% |
|
|
Total Games |
£2,873.0 |
£2,957.2 |
2.9% |
|
|
|
|
|
|
|
Total Entertainment |
Physical |
£2,578.4 |
£2,194.3 |
-14.9% |
|
|
Digital (inc streaming) |
£3,558.0 |
£4,123.6 |
15.9% |
|
|
Total Entertainment |
£6,136.4 |
£6,317.9 |
3.0% |
Sources:
Music - Physical and digital (The Official Charts Company), Streaming (ERA estimates)
Video - Physical (The Official Charts Company), Digital (IHS estimates, including EST, TV-VoD, web-based VoD and sVoD services)
Games – Physical (GfK), Digital (IHS estimates, including digital online, mobile and tablet gaming)
Video: Digital overtakes physical for the first time
- Digital video revenues from the likes of Netflix, Sky, Amazon and Apple reached £1,309.3m in 2016, up an incredible 22.8%.
- In contrast physical revenues were down 16.9% to £893.6m with both DVD and Blu-ray suffering double-digit declines.
- The biggest-selling video of the year was Star Wars: The Force Awakens with sales of 2.3m units.
Music: Entertainment’s fastest-growing sector
- Music revenues grew by 4.6% in 2016, well ahead of video (up 2.2%) and games (up 2.9%) powered by a huge 65% rise in music subscription revenues driven by services such as Spotify, Apple Music, Amazon and Deezer.
- The biggest decline was suffered by downloads (down 26.8% overall). After a relatively resilient 2015 when sales declined just 3.7%, CD revenues fell by 13% in 2016.
- The biggest-selling album of the year was Now That’s What I Call Music 95 with sales of 908,500 units.
Games: Digital has 74% share, but handheld games grow 21.3%
- Games revenues grew by a relatively modest £84m in 2016 (up £256m in 2015).
- Physical games sales declined 16.4% to £776m, while digital revenues grew 12.1% to reach £2.1bn. Positive news for physical came with a 21.3% increase in sales of handheld games
- The biggest-selling game of the year was perennial hit FIFA 17, which with sales of 2.5m sold almost exactly the same number of units as its predecessor FIFA 16.
ENDS
ERA CEO Kim Bayley is available for interview
For more information please contact Steve Redmond steve@eraltd.org (07770 924720) or Lynn Li lynn@eraltd.org (0207 440 1597)
About ERA
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)
ERA members supply the sales data which powers the Official Charts Company (music and video charts) and GfK Chart-Track (videogames). Together with record companies trade association the BPI, it owns the Official Charts Company.
ERA provides the organisational force behind Record Store Day, the annual celebration of independent record stores which has become the most successful new music industry promotion of the past two decades.
ERA works closely with its sister organisations in music, video and games and is a strong proponent of open markets, open standards and consumer