ERA data reveals biggest hits still rely on physical sales

ERA data reveals biggest hits still rely on physical sales

The continued growth in streaming revenues – also underlined in the latest BPI figures for 2018 – helped the entertainment market to an all-time high of £7.537 billion in 2018.

According to preliminary data compiled by the Entertainment Retailers Association (ERA), the overall market was up by 9.4%. A sixth successive year of growth was driven by services including Spotify, Steam, Netflix, Amazon, Deezer, Sky, Apple and Google, with digital revenues accounting for 76.1% of entertainment sales value in 2018, according to ERA.

Music revenues showed consistent growth alongside ERA’s figures for video and games.

The total music market was up by 8.9% year-on-year to £1.335bn. Streaming revenues hit £829.1m in 2018 (up 37.7% and driven by subscriptions), while physical was down 16.6% at £383.2m and downloads slumped by 25.7% to £122.6m.

But ERA’s figures show that physical releases are still vital for the biggest hits. The Top 20 albums of the year averaged 61% physical sales.

The Greatest Showman led the way with combined music and video sales of 4.3m, of which almost 2.75m (64%) were physical. George Ezra’s Staying At Tamara’s, the second biggest-selling album of 2018, moved 487,064 physical copies (70.4% of its total) last year.

These figures are a testament to the investment and innovation of digital services

Kim Bayley

ERA CEO Kim Bayley said: “On a market level these figures are a stunning testament to the investment and innovation of digital services who have transformed the fortunes of an entertainment industry many had thought was doomed by the internet and piracy. Significantly in this week of HMV’s news, however, the data shows that if you want a real mass market hit, you need the reach and convenience of physical formats. 

“In music even today more people buy CDs than pay for streaming subscriptions and in video more homes have DVD players than subscribe to all the leading video services put together. The challenge for physical retailers is to tap into this huge market of occasional buyers.”

Digital now dominates all three sectors at the market level, generating 80.1% of games revenues, 72.3% of video and 71.3% of music.

The biggest winner in entertainment’s digital transformation has been the games sector. For the first time in 2018, games accounted for more than half of the entire UK entertainment market (51.3%).

Bayley said: “The games industry has been incredibly effective in taking advantage of the potential of digital technology to offer new and compelling forms of entertainment. Despite being the youngest of our three sectors, it is now by far the biggest.”

ERA’s market figures aggregate data from market analysts including the Official Charts Company, GfK, Futuresource Consulting, GSD and IHS. Preliminary numbers will be updated and confirmed with the publication of the ERA Yearbook in March 2019.

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