Digital entertainment sales broke through the £1 billion barrier for the first time in 2012, recent figures from the Entertainment Retailers Association (ERA) have revealed.
Consumers spent £1.033 billion during the year on downloaded music, video and games, and sales of these items grew by 11.4 per cent.
Digital sales now account for a quarter of the combine d entertainment market, while sales of physical discs dropped by 17.6 per cent in comparison with 2011.
Despite accounting for three quarters of the entertainment market, physical entertainment retailers are struggling to compete with digital downloads, with Game falling into administration in March 2012 and HMV expected to breach its banking covenants later this month.
Focusing on the positive news, Kim Bayley, ERA Director General, commented: “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.”
Video has retained the largest share of the physical format market, with 93.9 per cent of video sales on disc (DVD or Blu-ray), while physical sales of videogames have decreased the most, down by 26.4 per cent.
Digital videogame sales also accounted for the biggest proportion of the £1.033 billion total, increasing by 7.7 per cent to £552.2 million.
Music downloads rose by 15.1 per cent to make £383.3 billion, and this figure did not take into account streaming services such as Spotify, Deezer, We7 and Rdio. But overall sales in the combined entertainment market were down 12 per cent to £4.21 billion, a drop which has been blamed on a lack of quality releases, particularly during the summer due to the Olympics.
Commenting on the overall figures, Ms Bayley said: “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.
“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.”