According to new official figures published today (March 6) in the Entertainment Retailers Association (ERA) Yearbook, sales of video, music and games grew by 2.4% in 2019 to reach a new all-time record of £7.8bn. The report confirmed this was their seventh successive year of growth.
An official press release stated that the key driver of growth “was the increasing popularity of digital streaming with digital now accounting for a record 81.8% of the overall entertainment market.”
In contrast, the report noted that it was actually physical formats that accounted for 80% of revenue less than a decade ago.
The fastest-growing sector reported was video - up 9.5% in value to £2.61bn. Its success was mirrored in the music market with total revenues up 7.1% to £1.4bn, which was driven by a 23.5% increase in music streaming revenues to just over £1bn.
The report also highlighted that the internet – including internet-ordered physical entertainment formats through online stores – dominates over bricks and mortar, now accounting for 89.8% of entertainments revenue.
Speaking about the news, ERA CEO Kim Bayley said: “This is extraordinary. The internet now accounts for 90p in every pound spent on entertainment. It is quite simply the most dramatic revolution in entertainment retailing ever seen.”
Despite this, ERA’s report stated that in 2019 many of the biggest hits of the year owe their success to physical, with almost all titles at the top of the charts selling better on physical rather than digital formats. The report stated that there were 8,450 outlets selling music in 2019.
There were 521,029 albums available to download but 606,906 titles on CD.
ERA-commissioned research pointed to the growing importance of the over-45s to sales of physical formats with 62.8% of physical music sales accounted for by the older age groups.
Bayley added: “Physical entertainment still amounted to a £1.4bn market in 2019. It is certainly down, but it is far bigger than many appreciate and still offers benefits in terms of gifting, collectability and permanence which streaming cannot match.”
Key beneficiaries of the continuing demand for physical music formats – particularly vinyl – are indie record shops. In 2019 the number of indie stores remained at a 10-year-high of 425. Independents were the only physical music store category not to see a decline in numbers in 2019.
Bayley concluded: “While much of music spending has moved online, independents with a distinctive, locally-tailored offering continue to flourish.”