Business News Labels & Publishers Retail

Digital content sales exceed £1 billion, but entertainment retail sales down overall

By | Published on Thursday 3 January 2013


Annual digital content sales exceeded a billion pounds for the first time in 2012, according to figures published by the Entertainment Retailers Association yesterday. Though, while digital sales are close to surpassing physical product sales in the British recorded music sector, when gaming and especially video releases are taken into the mix, physical products still account for about three-quarters of entertainment retail overall. Digital music, video and gaming products generated £1.033 billion last year, according to ERA’s figures, which is 11.4% up on 2011. Physical products were down 17.6% overall, but still outsold digital threefold.

Commenting on the year-end stats, ERA Director General Kim Bayley told CMU: “Breaching the £1 billion 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. 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”.

As with the music sector on its own, while digital sales are booming, overall the entertainment retail market is down, 12% compared with 2011 to £4.21bn. Aside from the challenges posed by the shift from physical to digital, a weak release schedule played its part in that decline, ERA reckons, as did the increased tendency for entertainment companies to schedule an increasing number of their major releases in the Autumn, a trend the entertainment retailers are pushing to reverse.

Bayley continues: “The dearth of attractive releases during summer 2012 was clearly a significant factor [in declining sales overall]. Suppliers need to do more to rebalance their release schedules and improve the quality of their releases. No retailer can afford to pay overheads on a store for 52 weeks of the year if all the key releases are going to be concentrated in the last quarter. And entrepreneurs will think twice about investing in new digital services if releases fail to excite the public. Luckily the message appears to be getting through and we look forward to being able to offer the public a much better release slate in 2013”.