Digital Sales Smash £1bn Barrier In 2012

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E-commerce thriving as overall entertainment market declines

Digital sales of music, films and games in the UK surpassed £1 billion for the first time in 2012, figures from the Entertainment Retailers Association (ERA) have shown.

The digital increase was met with a bigger decline in physical sales, leaving the entertainment industry in decline overall. But industry players have been told to get smarter with their releases, rather than blame the impact of piracy for this.

Digital sales hit £1.033 billion last year, with growth of 11.4 percent compared to 2011, whilst there was a dip in sales of physical CDs, DVDs, Blu-ray and videogames of 17.6 percent.

Digital sales boom

“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,” said ERA director general, Kim Bayley.

“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 biggest digital sector remains the games industry, which saw sales of £552.2m in 2012, meaning it was worth more than the digital music and film sectors combined.

The music market grew 15.1 percent, compared to 20.3 percent in the digital film industry. However, the figures did not include data on the impact of streaming services like Spotify.

Preliminary data from the Official Charts Company showed music streaming services delivered 3.7 billion streams in the UK in 2012.

Physical music sales were down 14.9 percent, as DVD and Blu-ray sales dipped 11.4 percent. However, physical sales have retained a dominant share of the entertainment industry.

Don’t blame the pirates

Yet overall the picture was somewhat grim. Combined sales of music, video and videogames were down 12 percent to £4.21 billion.

“The dearth of attractive releases during summer 2012 was clearly a significant factor. Suppliers need to do more to rebalance their release schedules and improve the quality of their releases,” added Bayley.

“Entrepreneurs will think twice about investing in new digital services if releases fail to excite the public.”

Executive director of the Open Rights Group Jim Killock told TechWeekEurope that entertainment companies needed to focus on better products, rather than blaming declining markets on piracy.

“Digital growth is great, but it’s clear that film companies in particular need to move quickly to fulfil consumer demand,” Killock said.

“Bringing products to market, not sledgehammer copyright enforcement, is what will improve the fortunes of the music and film businesses.”

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