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Physical entertainment formats continue to prosper

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Video, games and music sales scored their second successive year of growth in 2014, rising 2.2% to £5.66bn, according to preliminary figures from the Entertainment Retailers Association.

ERA is the trade association for entertainment retailers of every kind, from specialists and independents, to supermarkets, internet and download retailers as well as the new generation of streaming services, such as Spotify and Netflix.

The results were propelled by positive digital sales, now running directly alongside physical formats, each with sales of just over £2.8bn. The latter does however, continue to remain more resilient than expected, with video sales dominated by DVD and Blu-ray, and albums on CD and vinyl still outselling album downloads by two-to-one.

The strongest performer in the entertainment market in 2014 was video games, up 7.5% by value to £2.45bn. Video and music fell slightly, video declining 1.4% to £2.18bn and music down 1.6% to £1.03bn.

The fastest-growing sector was the subscription music streaming business, which came of age in 2014, with the inclusion of audio streams in the official singles chart. The channel ended the year up 65% to £175m.

Kim Bayley, Director General at Entertainment Retailers Association said:

“2014 was a remarkably successful year for retailers and digital services as they continued to invest in the future of the entertainment business. More than half of entertainment revenues now come from retail channels which did not even exist a decade ago.”

She added:

“Too often the debate about the future of entertainment is portrayed as a battle between physical and digital. This second successive year of growth demonstrates entertainment is becoming a mixed, multi-channel economy in which streaming, digital and physical formats can both prosper, each satisfying different consumer needs.”

Games, video and music at-a-glance:

Powered by the growth of mobile and online gaming and the launch of the Xbox One and PS4 console platforms late in 2013, videogames was for the second-year-running the star performer in the entertainment market, surging 7.5% to £2.45bn.

Total video sales declined 1.4% to £2.18bn. Digital sales of download-to-own, digital rental and streaming services increased. Interestingly, DVD and Blu-ray sales continued to decline, but still account for more than half of the market; despite the rise of digital, the physical rental market still generated sales of £109m.

Music sales declined 1.6% in 2014 to £1.03bn, but the headline number obscures some dramatic shifts. The streaming subscription business led by Spotify increased by 65% to £175m, while music downloads dominated by Apple’s iTunes fell. CD album sales also fell whereas vinyl albums, albeit still a niche market worth just £25.9m, grew 76% on sales of 1.36m units.

Disney’s animated fantasy-comedy musical Frozen was by far the biggest-selling entertainment product of the year, selling over 4m copies (50% more than the bet-selling video game Fifa 15). Other titles in the top 20 best-selling list included Call of Duty: Advanced Warfare, The Wolf of Wall Street and The Lego Movie.

Published on Friday 02 January by Veebs Sabharwal

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