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Home Entertainment Spending on Access in the U.K. Trumps Ownership

10 Mar, 2017 By: Erik Gruenwedel

Consumers in the United Kingdom in 2016 overwhelmingly took to subscribing to home entertainment services instead of purchasing content, according to new data from the Entertainment Retailers Association.

Online and mobile-generated digital home entertainment revenue accounted for 77.7% of the £6.32 billion ($7.6 billion) spent on music, video and games, with physical stores accounting for 22.3%.

For the first time, spending on access via services like Netflix, Amazon Prime Video, Spotify and apps such as Pokémon Go exceeded expenditures on ownership models such as packaged media and content downloads.

“We are seeing the rise of a pay-monthly generation in entertainment. Rather than buying music, video or games outright, the British public is being won over by rental or all-you-can eat services, which are available 24/7. If downloads represented the first digital revolution in entertainment, we are now at digital 2.0, the subscription age,” Kim Bayley, CEO of ERA, said in a statement.

Indeed, access services accounted for 51.3% ($1.39 billion) of entertainment expenditures with 48.7% ($1.33 billion) spent on discs and downloads. A key factor was the booming expenditure on music and video streaming services.

The ERA said that despite the digital surge, packaged media remains resilient. The number of outlets selling music and/or video in the U.K. has increased in each of the past eight years and now stands at more than 15,300 retailers, driven by an increase in non-traditional and convenience stores stocking discs.

“Digital may grab the headlines, but we should not underestimate the fondness of the U.K. public for physical formats in particular. While the vinyl revival has been well reported, millions of people still regard DVDs, CDs and console game discs as the best way to access entertainment,” Bayley said. “Discs are durable, convenient and are still probably the best entertainment option for gifting.”

Entertainment in 2016 posted its fourth successive year of growth, scoring its best year-on-year performance since 2000. Video games now account for nearly half of the entertainment market (46.8%), its highest share ever.

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