‘Booming’ Subscription Sales in the UK Boost Video and Music Streaming Revenues to £5.3B in 2013

By Katherine Noyes If there was any doubt remaining that the Internet has changed the face of home entertainment forever, the Entertainment Retailers Association

By Katherine NoyesIf there was any doubt remaining that the Internet has changed the face of home entertainment forever, the Entertainment Retailers Association on Wednesday published some tidy evidence.First off, the UK home entertainment market increased by 4% year on year to reach £5.3 billion in 2013, according to ERA figures, marking its first increase in five years. More to the point, however, is the fact that “booming” subscription sales by services like Netflix, LoveFilm and Spotify were largely responsible for that rosy picture.Such “access services” — allowing consumers to access content rather than purchasing it outright via discs or downloads — include streaming services for music and video as well as in-app purchases for games, and they grew to a 26% share of entertainment revenues, ERA says. More traditional ownership models for entertainment content, on the other hand, fell back to 74%. In total, access models grew by 35.6% in 2013 to reach £1.377 million.Indeed, access services are the fastest growing segment of the online entertainment market, ERA says. Included among their ranks are video subscription services such as Netflix and LoveFilm, whose total revenues grew by 120% in 2013; music streaming services like Spotify and Deezer, which were up 34% year on year; and a variety of gaming services including in-game microtransactions, subscriptions to PC multiplayer online games, on-demand games and in-app purchases.In all, Internet-derived sales, including home delivery, digital download and streaming and other access services, accounted for a 60% share of sales, representing an increase of some 14% over 2012. The remaining 40% of revenue was generated by physical stores — down 8%.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.”

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