Digital downloads break £1bn barrier for first time

Jan 2, 2013

Digital now accounts for a quarter of entertainment market – bad news for high street retailers

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DIGITAL downloads of music, TV, film and video broke through the £1bn barrier in the UK for the first time last year and downloads now make up a quarter of the entertainment market. But balancing the growth in digital sales was a big drop in physical sales – which is more bad news for the high street.

Digital downloads grew by 11.4 per cent during 2012, but physical sales of DVDs, CDs and other formants were down 17.6 per cent on 2011, and now account for 75 per cent of the market, something that leaves retailers with "little to cheer about", according to The Guardian.

"Physical entertainment retailers such as HMV and Game have struggled over the past year as the rise in popularity of digital downloads has put pressure on the sales of the physical products," noted Retail Week.

More than half of digital sales came from video games, which grew by eight per cent to £552m. However, video was the big mover and digital sales grew by 20 per cent in 2012. According to the Daily Telegraph, video's growth came "as download services such as Apple's iTunes succeeded in persuading users to download video en masse for the first time".

The Entertainment Retailers Association warned that many stores would struggle to carry on in the current climate. Kim Bayley, head of the ERA, noted that 2012 had been a lop-sided year with most big games releases coming after the summer, but she warned: "No retailer can afford to pay overheads on a store for 52 weeks of the year if all the key releases are going to be concentrated in the last quarter."

And although Bayley hailed the "incredible achievement" of the overall download market in breaking the £1bn barrier, she added: "I suspect that many people will be surprised to learn just how resilient the physical business still is - with three-quarters of entertainment sales still on disc. Downloads offer convenience and portability, but people still seem to value the quality and tangibility of a physical product.”

Separate figures for the music industry showed that album sales fell last year as music fans ignored both CDs and digital download versions in favour of singles and modern streaming services. Single sales rose to 188.6m last year and more than 99 per cent were sold digitally.

"Music fans are buying fewer albums because these may have a track or two they do not [like] when the digital era means they can simply pick and choose which tracks they want to download," explained the Daily Mail.

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