The UK home entertainment market enjoyed its 10th consecutive year of growth in 2022 to reach an all-time-record, according to figures published today in the annual yearbook of digital entertainment and retail association ERA.
With 14.1% of sales still from physical formats, music remains well ahead of games (10.5%) and video (4.9%). Vinyl is helping to maintain physical's share of music - the format still accounts for 54% of the value of the physical albums market.
Meanwhile, the share of CD sales taken by catalogue titles has increased every year since 2018 from 37% to 49%.
Of course, the impact of new technology will be key in terms of how the market develops.
Here, Ben Drury, chair of ERA and co-founder of children’s audio platform Yoto, shares insights on his appointment last year, the enduring power of physical music and why AI is the future...
You have to go away to come back, said fantasy novelist Terry Pratchett, and I guess that’s precisely what I’ve done as I return to ERA as chair, seven years since I left the association.
The scale of the growth in the entertainment business over that time has been phenomenal. The combined music, video and games businesses were worth just under £6bn in 2015. Updated figures for 2022 show that last year they were not far off twice that - £11.2bn. Maybe I should go away more often!
When my appointment was announced, I recalled that in my first stint at ERA, I was the association’s first ever board member to represent the then new-fangled world of digital music. There was initial resistance on all sides of the industry to this revolution, something which seems frankly ridiculous in retrospect.
The history of the entertainment business from the wax disc to the DVD to the games console is that, even more than content, it is technology which drives revenues.
That’s why you can expect me as chair to be an advocate of technology even if at first glance it may seem to threaten established ways of doing things. That means AI, virtual and augmented realities and the metaverse are definitely on our agenda.
We need to embrace the opportunities they make possible even though we know that not all of them may succeed. But I’m not a proverbial technology magpie, just attracted to the “bright shiny new things” of technological progress. I personally completely avoided cryptocurrency having never spent a single penny of real money on bitcoin et al. I also have been healthily sceptical of metaverse and Web3 hype.
I urge ERA members to educate themselves and try all these tools to understand the impact of AI
Embracing the new does not of course mean we necessarily abandon older ways of doing things.
Despite the increasing presence of digital music, vinyl records have experienced a resurgence in recent years. More and more people are buying records as a way to enjoy their favourite songs in a physical format.
Vinyl sales have grown steadily for the past decade, reaching their highest levels since the early 1990s. Music fans are attracted to the warm sound, the tangible experience of playing a record and the collector’s item nature of owning a piece of music history.
Even with the proliferation of digital music, it’s clear there’s still a place for vinyl in the modern world.
Back to technological advancement, the above section [in italics] was written by OpenAI and we can already see that 2023 will be defined by a “Cambrian Explosion” of AI development and tools.
Many of these will lead to increased productivity and the emergence of amazing new products and services. There will be a dark side though, and the creative industries could be especially affected.
I urge ERA members to educate themselves and try all these tools to understand the impact.
Much is quite rightly made of ERA’s remarkable reinvention in which this previously 100% physical record store association now represents virtually all the major music streaming services, but the flowering of ERA’s independent membership has also been a notable achievement.
I am proud to head an organisation which represents the largest multinational streaming services alongside the cream of the UK’s indie record stores.