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Netflix, Spotify and other streamers drive UK entertainment revenues

Websites contribute a quarter of cash
Wed Mar 12 2014, 09:36
much money

UK CONSUMERS apparently can't get enough of on-demand streaming services, and that market produces a quarter of UK entertainment revenues.

Hard copy physical format sales might be falling, but the UK Entertainment Retailers Association (ERA) said that streaming websites - it calls them "access models" - are in the ascendancy.

These include not only Netflix and Lovefilm, but also Spotify and Deezer and in-app purchases. The ERA said that last year these services contributed 26 percent of the £5.3bn entertainment market in the UK.

That's not all. Internet sales or internet derived sales make up 60 percent of all entertainment revenues, a clear majority.

"This is stark evidence of the revolution in entertainment consumption being driven by entertainment retailers," said ERA director general Kim Bayley.

"The fact that 60p in the entertainment pound is now spent online and 26p in the pound is for access to content rather than ownership is a testament to the huge investment and technological ingenuity of retailers in providing consumers with new ways to enjoy the music, video and games they love."

The last year saw a number of websites make their mark on entertainment, the ERA said, and it credited Netflix, Google, HMV, Deezer and Spotify for growing users and making strategic alliances. Overseas the game firm Valve was credited with launching its Linux gaming PC Steambox.

"The transformation of the entertainment market is often misrepresented either as some kind of force of nature beyond human control or as a far-sighted initiative of record and video and games companies. It is neither," added Bayley.

"The entertainment revolution has been driven by new and existing retailers taking huge gambles and investing in technology and new delivery mechanisms. The striking thing, however, is that 10 years after the launch of iTunes and then the rise of mobile entertainment, physical formats still account for a clear majority of entertainment market sales."

Physical stores took in £2.12bn in sales, an eight percent decline from 2012 figures. Online sales, a combination of internet home delivery websites and digital services, grew by just under 14 percent to £3.18bn.

The fastest growing category is the streamers like Netflix. Total streaming revenues - which include in-app purchases, on-demand games and PC game subscriptions - increased by 36 percent to nearly £1.38bn. µ

 

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