Entertainment market grows in 2013 but discs no longer fly

Digital services such as Netflix and Blinkbox helped the entertainment market grow for the first time in five years – but physical products such as discs continued to decline.

Overall sales of music, video and games grew 4% in 2013 to £5.3bn, according to preliminary year-end figures released this week by trade body the Entertainment Retailers’ Association (ERA). Although total music sales dipped 0.5% by value, video games were up 6.6% and video 3.7%.

Describing the figures as “stunning”, ERA director general Kim Bayley said: “Retailers have invested hundreds of millions of pounds in new digital services and these numbers suggest the public is responding in their droves.”

Digital services provided by the supermarkets include Tesco’s Blinkbox, which offers music, TV and films and will extend into ebooks this year. Tesco has been marketing the service heavily through TV advertising and promotional activity.

“The online opportunity lies in digital products. The move is in line with wider industry trends towards on-demand entertainment”

Sainsbury’s spokesman

Sainsbury’s, meanwhile, offers digital downloads and physical products through its Sainsbury’s Entertainment website. It recently announced the site would be going digital-only in March 2014, and that physical products would be sold only through its stores.

“The online opportunity lies in digital products,” said a Sainsbury’s spokesman. “The move is in line with wider industry trends towards on-demand entertainment, and part of our focus [is] on the fast-growing download and streaming market.”

Physical media

This week’s ERA figures revealed that sales of physical media had continued to decline, with games down 2.9%, video down 6.8%, and music down 7.6%. The proportion of games sold on physical media has fallen to 46.3%, video to 69.2% and music to 52%.

In contrast, digital sales of games – which include mobile, PC and console downloads – grew by 16.4% and video by 40.2%. Digital music sales rose 3.3%, while sales via streaming music services such as Spotify and Deezer have risen 33.7%.

“The big growth story in entertainment is clearly digital,” said Bayley, adding that growth in sales of Blu-ray video and vinyl music albums showed physical formats could still flourish “when they are able to offer something distinctive”.

ERA also revealed the biggest entertainment titles of 2013 – with video game Grand Theft Auto V topping the chart after selling 3.67 million units (see table below). The biggest-selling video title was James Bond movie Skyfall – which had performed particularly well in the supermarkets – while Now That’s What I Call Music 86 was the top album.

Entertainment’s Greatest Hits 2013

Source: ERA