ERA - Entertainment Retailers Association
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More physical stores sell music and video than ever before

The number of physical stores selling music, video and videogames reached an all-time record in 2014

More physical stores sell music and video than ever before 

Entertainment retailers smash 10,000 outlet barrier 

UK digital entertainment services now exceed 120

 

24 February 2015:  The number of physical stores selling music, video and videogames reached an all-time record in 2014, according to new figures due to be published in the Entertainment Retailers Association (ERA) Yearbook tomorrow (Tuesday, February 24).

Despite a challenging physical market for CD, DVD and Blu-ray, the number of physical outlets selling video grew by 18.8% over the previous year to reach 10,500 while the number of outlets selling music increased by 20.4% to 10,391. The number of games outlets grew by 1.3% to 5,665.

The growth in the number of physical outlets comes despite the rapid growth of digital services. Industry estimates suggest there are now 123 digital entertainment services operating in the UK (76 music, 25 video and 22 games).

ERA CEO Kim Bayley said, "This is an extraordinary result which means that UK consumers have a greater choice of outlets from which to buy music, video and games than ever before. From specialist chains and independents, through to supermarkets and fashion stores, to internet retailers, download and streaming services we can all now access music, video and games wherever or whenever we want."

Key reason for the growth in the number of physical outlets selling entertainment is an increase in the number of supermarket convenience stores and generalist retailers like Wilko, BHS and Matalan selling limited ranges of music and video aimed at the impulse market.

Said Bayley, "Physical outlets seem to have the edge when it comes to impulse and gift purchases. You cannot giftwrap a download or stream."

 Number of ent outlets 

 Internet and digital sales now dominate

The increase in the number of physical entertainment outlets comes despite the continued momentum of internet retailers (such as Amazon) and digital services (Netflix, iTunes, Spotify etc).

In 2014 sales through bricks and mortar outlets accounted for just 33.9% of the £5,664.7m entertainment market with internet-based transactions (comprising internet-ordered physical product as well as downloads and digital services) accounting for 66.1%.

The videogames market is now 61.3% digital and with digital's share of the combined video, games and music markets 49.9% digital in 2014, 2015 looks likely to be the year entertainment becomes a majority digital market. 

Physical vs digital

Console games, video and music streaming and vinyl albums are fastest-growing formats

While the combined video, games and music business grew by a modest 2.3% in value in 2014, some product areas showed dramatic growth.

Most notable was soaring growth in the games market, with digital games up another 18.8% to £1.5bn and the impact of the first full year's worth of sales from the next generation games consoles, the Sony PS4 and Microsoft's Xbox One, which together generated sales of over £500m.

But there were also strong performances from digital video (Netflix, Amazon Prime Instant Video, Sky, iTunes), music streaming (Spotify, Deezer) and vinyl albums.

 fast growing

Entertainment's next great revolution - access services

Entertainment retailing has traditionally been based on selling ownership in a disc (or a tape), but in 2014 for the first time one third of revenues came from subscription and on-demand services which are based on selling access rather than ownership.

Games is the biggest access category, driven by mobile 'free-to-play' in-app purchasing, micro-transactions and online subscriptions to multiplayer online games. Nearly £1bn was spent on accessing games in 2014, representing 40% of the games market. 

The rapid rise of digital video subscription services like Amazon Prime Instant and Netflix, combined with significant growth in on-demand film and TV transactions via satellite and cable TV operations like Sky Store and BT TV, increased video access revenues by 17.3% to £754m. 

However, it was 'all-you-can-eat' music subscription streaming services where consumer-spend on access services grew fastest of all in 2014. The £175m spent in the UK on accessing music via services like Spotify and Deezer was up over 65% year-on-year.  

ownership

 ERA CEO Kim Bayley said, "Ever since the birth of UK entertainment retailing in 1921 with the opening of the first HMV in London's Oxford Street, entertainment retailers have proven themselves to be innovators. Thanks to the ground-breaking technology and heavy investment of a new breed of entertainment retailers offering access services, we are witnessing a revolution in the entertainment industry, benefitting consumers, creators and content owners alike."

ENDS

For more information please contact Steve Redmond at steve@eraltd.org or on 07770 924720

 About the ERA Yearbook

The 2015 ER4 Yearbook, published on 24 February 2015, is the latest edition of what has become the industry-standard statistical resource for the retail video, games and music markets.

It draws together research from the Official Charts Company (physical and digital music and physical video), GfK Chart Track (physical videogames) and IHS (digital video and videogames) to provide the definitive overview of the UK entertainment market.

 About ERA

ERA is the trade association representing the vast majority of retailers and digital services offering music, video and games. Its members range from independent record shops (Reflex, Sister Ray) to digital services (Spotify, Netflix, Deezer, 7digital) to internet retailers (Amazon) to specialist High Street operators (HMV, Game) and supermarkets (Tesco, Sainsburys, Asda, Morrisons) 

ERA members supply the sales data which powers the Official Charts Company (music and video charts) and GfK Chart-Track (videogames). Together with record companies trade association the BPI, it owns the Official Charts Company.

ERA provides the organisational force behind Record Store Day, the annual celebration of independent record stores which has become the most successful new music industry promotion of the past two decades.

ERA works closely with its sister organisations in music, video and games and is a strong proponent of open markets, open standards and consumer choice.

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