Following on from the BPI’s 2017 report, according to interim data compiled by ERA (Entertainment Retailers Association), the entertainment market reached a new all-time high of £7.24 billion in 2017. The 8.8% sales growth of the music, video and games sectors outpaced growth in the wider UK economy by a factor of more than four.
With specific regards to the music industry, its total revenue grew by 9.6% to £1.2 billion in 2017, almost twice 2016’s growth rate (4.6%). The big story within this was the continued growth of streaming subscription services with Spotify, Apple Music, Amazon and Deezer helping revenues grow 41.9% to £577.1 million – marking the first time they have exceeded half-a-billion pounds. Downloads, however, were down 23.1%, with the 2016 total of £214.6m shrinking to £165m in 2017.
While the report revealed that digital services captured 71.9% of entertainment sales value in 2017, the statistics also evidenced the continuing appeal of physical formats with sales of vinyl albums growing by more than a third compared with 2016. Vinyl continued its decade-long recovery, up 33.7% to £87.7m.
Speaking about the report’s evidence of the continued appeal of physical formats , ERA CEO Kim Bayley said: “Physical may no longer be the default option for many people that it once was, but it remains a substantial £2 billion business. Where physical really comes into its own is where it offers something distinctive and additional to the content, whether it be the tactile experience of vinyl or the simple fact that physical objects work well as gifts. I remain confident that physical entertainment formats will continue to be with us for years to come.”
The report aggregated data from the Official Charts Company, GfK and IHS. Preliminary numbers will be updated and confirmed with the publication of the ERA Yearbook in March 2018. The results mark the fifth successive year of growth for the UK entertainment market, driven by a raft of successful new digital services from the likes of Spotify, Steam, Netflix, Amazon, Deezer, Sky, Apple and Google.
Bayley added: “This is an historic result which demonstrates the benefits of innovation and investment in new technology. New digital services are bringing ever increasing numbers of the UK population back to entertainment with 24/7 access to the music, video and games they want. In the past the growth of the market tended to be dependent on the release schedules of games publishers, film studios and record labels. Now we are seeing a market which is also driven by digital platforms and technologies.”