Subscription Streaming Overtakes Physical/Digital Transactions in the U.K.

As expected, subscription streaming video and music services have supplanted physical/digital transactions in the United Kingdom, the world’s third-largest home entertainment market.

More than 60% of consumers collectively streamed music, video and video games in 2018, compared to 39% who purchased content in physical or digital formats.

“This is a significant moment,” Kim Bayley, CEO of the Entertainment Retailers Association, said in a recent statement.“New digital services have created a “generation rent” for whom [direct] access models seem natural. It is nothing less than a revolution in the entertainment business.”

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The trend mirrors the United States, where subscription streaming (i.e. Netflix, Amazon Prime Video, Hulu, etc.) accounted for 60% of consumer home entertainment spending in the first quarter, ended March 31.

Similar to U.S., the Internet and streaming are driving overall home entertainment segment growth. U.K. revenue grew for the sixth consecutive year in 2018 to a record £7.5 billion ($9.7 billion), up 9.4% from $8.8 billion in 2017.

Digital now accounts for 76.1% of revenue. As recently as 2011, digital’s market share was less than 20%. Around 85% of total entertainment retail revenue is generated over the Internet.

Meanwhile, sales of DVD, Blu-ray Disc and 4K UHD Blu-ray continue. Brits spent $523.5 million on DVD movies and TV shows; $145.7 million on Blu-ray and $21.9 million on 4K UHD Blu-ray.

“Video has gone full circle – from a rental-based business at the dawn of VHS, to an ownership model with DVD and now a subscription/rental model,” Bayley said.

ERA: Physical Discs Still Coveted for Movie Ownership in the U.K.

It may be a streaming video world dominated by Netflix, but when it comes to owning the biggest movies of the year, DVD and Blu-ray Disc still resonate best among consumers in the United Kingdom.

New data from the Entertainment Retailers Association found that among sales of the Top 20 movies in 2018, more than 74% occurred on physical disc. Among the Top 20 music albums, 61% were sold in the physical format.

Meanwhile, subscription streaming services helped the entertainment market in the United Kingdom reach an all-time-high of £7.5 billion ($9.5 billion) in revenue in 2018, according to new data compiled by the Entertainment Retailers Association (ERA).

For a sixth successive year of growth driven by digital services from the likes of Spotify, Netflix, Amazon Prime Video, Apple and Google, digital revenue accounted for more than 76% of entertainment sales in 2018, according to ERA.

Digital revenue now dominates all three sectors, with digital generating 80% of games revenue, 72.3% of video and 71.3% of music.

The biggest music and video hit of the year, Fox’s The Greatest Showman, sold nearly two-thirds of its combined 4.3 million sales on CD, DVD and Blu-ray. The biggest-selling console game of the year, FIFA 19, sold 2.5 million units, around 75% on physical formats.

“The data shows that if you want a real mass-market hit, you need the reach and convenience of physical formats,” Kim Bayley, CEO of the ERA said in a statement. “The challenge for physical retailers is to tap into this huge market of occasional buyers.”

 

ERA Preliminary Entertainment
Sales Totals 2018 (£m)

2017 2018 % change
Music Physical £459.4 £383.2 -16.6%
Downloads £165.0 £122.6 -25.7%
Streaming £601.9 £829.1 37.7%
Total Music £1,226.3 £1,334.9 8.9%
Video Physical Retail £742.1 £616.9 -16.9%
Physical Rental £40.5 £31.7 -21.7%
Digital £1,341.0 £1,689.4 26.0%
Total Video £2,123.6 £2,337.9 10.1%
Games Physical £792.4 £769.9 -2.8%
Digital £2,750.0 £3,094.0 12.5%
Total Games £3,542.4 £3,863.9 9.1%

 

U.K. Home Entertainment Trade Groups Bow Weekly Video Chart Show

The Official Charts Company, the British Association for Screen Entertainment (BASE) and the Entertainment Retailers Association last month launched “The Official Film Charts Show,” a weekly online video presentation showcasing the most-popular movies to buy or rent on disc or digital in the United Kingdom – the world’s second-largest home entertainment market.

The show tabulates the top 10 best-selling selling movies on disc and download for the week and also includes trailers for upcoming releases.

The video is available on OfficialCharts.com now includes movie downloads from Amazon Instant Video, iTunes, Sky Store, Virgin Media Store, Rakuten TV, Talk Talk TV, as well as 4K UHD Blu-ray, standard Blu-ray and DVD disc sales.

“The Official Film Chart will be the definitive snapshot of the U.K.’s favorite movies on disc and download – for the first time, both film fans and the industry will be able to review the biggest selling titles every week across both physical and digital formats, which is a huge step for the industry,” Martin Talbot, CEO of The Official Charts said in a statement.

Through six months in 2018, U.K. consumers downloaded more than 15 million movies – exceeding 2017 – and helping grow the overall market to about 55 million video sales across all formats (download, 4K UHD, Blu-ray and DVD).

Liz Bales, CEO of Base, said the need for a consumer-based online video promotional vehicle for home entertainment was long overdue.

“In an ever-changing, but consistently dynamic home entertainment industry, it has been felt for some time that there should be a method of both celebrating and signposting audience engagement with owned content,” Bales said. “With significant growth in digital ownership, and ongoing engagement with the full suite of physical options – including 4K UHD, Blu-ray and DVD – it is clear that film in all its forms continues to be a must-own commodity.”

‘Super Fans’ Driving Blu-ray Disc, DVD Market

Shout! Factory has created a cottage industry and industry reputation for its catalog packaged-media releases and pricey boxed sets.

The indie distributor’s Streets of Fire: Collector’s Edition took “Best Catalog Title” at the 2018 Home Media Awards, while in August it will release Mighty Morphin Power Rangers: The Complete Series — 25th Anniversary Edition Steelbook– a 20-disc collection selling for $200.

Shout!, along with other distributors, is targeting a growing lucrative consumer: the super fan. This demo apparently thinks nothing about spending $300 on Warner Bros. Home Entertainment’s DC Universe 10th Anniversary Collection, or $65 on Paramount Home Media Distribution’s Twin Peaks: A Limited Event Series, among others.

Indeed, these hardcore consumers are prepared to spend hundreds of dollars (and British pounds) on their lavish DVD and Blu-ray Disc collector’s sets and high-grade vinyl LPs  and are driving home entertainment sales, according to new data from the Entertainment Retailers Association. More than two thirds of sales of Blu-ray Discs in the U.K. are generated by the passionate fan.

“Music, video and games may reach virtually the entire population, but it is these £400-a-year [$500] super fans who are the backbone of the market,” Kim Bayley, CEO of ERA, said in a statement.

Indeed, British super fans accounted for 61% (£98.8 million/$131 million) of £162 million ($217 million) spent on Blu-ray Discs in 2017, compared to £62.9 million/$84.5 million of the£580 million ($780 million) spent on DVD.

The ERA estimated the U.K. Blu-ray super fan base at around 247,000 people — equivalent to the population of Southampton.

“Super fans are the connoisseurs of entertainment,” Bayley said. “They are passionate about music or film or games and tend to favor the more sophisticated higher-value formats.”

 

 

 

 

Roll Over, Shakespeare! Brits Spend More on Home Entertainment Than Print

British love for the printed word is apparently over.

Consumers spent more on music, streaming video, movies and video games in 2017 than on books, magazines and newspapers, according to new data from the Entertainment Retailers Association. It is the first time revenue from home entertainment exceeded print media.

Key drivers included digital services such as Spotify, Steam, Netflix, Amazon Prime Video, Deezer, Sky, Apple and Google.

According to research prepared for ERA by the Leisure Industries Research Centre at Sheffield Hallam University, Britons spent £7.2bn ($9.91 billion) on music, video and games compared to £7.1bn ($9.77 billion) on books, magazines and newspapers.

“It is an extraordinary testament to the appeal and resonance of digital entertainment services that they have helped home entertainment to hit this milestone nearly 550 years since the invention of the printing press,” ERA CEO Kim Bayley said in a statement.

While entertainment sales reached an all-time-high for the third year, spending on print was stagnant and substantially down on its 2007 peak of £8.3bn ($11.4 billion).

The entertainment growth rate (8.8%) exceeded that of virtually every sector monitored by the Leisure Industries Research Centre, including dining (up 7.7%), alcohol (up 6%), foreign travel (up 4.4%) and gambling (up 1%). Total leisure spending was up 5.2%.

“The 2008-2009 recession hurt both the entertainment and reading markets,” said Dr. Themis Kokolakakis with Leisure Industries Research Centre. “Since 2012, the entertainment market has recovered very strongly producing record 2017 results. [Print] media is under pressure, partly because of the growth of streaming services, partly because there is so much competition for people’s time and attention. Entertainment has grown while reading has stagnated.”

Meanwhile, five years ago more than 80% of revenue was generated by buy-to-own formats such as discs or downloads. In 2017, 56% of revenue came from music and streaming video, transactional VOD or subscriptions to online multiplayer games, digital micro-transactions and in-app purchases on mobile devices.

“The success of the entertainment business is a testament to the power of innovation, creating new ways for people to enjoy the music, video and games they love,” Bayley said.

Notable packaged media growth included boxed software for consoles such as the new Nintendo Switch and Playstation 4, which generated their first growth in 10 years – up 5% to £750m ($1 billion); and vinyl albums, with sales up 34% to £87.7m ($120 million).

“Digital services may be grabbing the headlines, but physical retailers continue to identify new opportunities to showcase and drive sales of discs,” said Bayley. “Vinyl is a prime example of retailers nurturing demand for a product most people had long written off. It would be foolish to underestimate the consumers continuing affection for physical product.”

Finally, Ed Sheeran’s album Divide was the best-selling music, video or game title in the UK in 2017, achieving sales of more than 2.7 million units.

In 2017, 33 music, video or game titles sold over half a million units. Of these, 10 sold over 1 million units and three over 2 million. Of the Top 40 biggest sellers, seven were music albums, 10 were video games and 23 were videos, led by a trio of titles from Walt Disney Studios – Beauty & The BeastRogue One – A Star Wars Story and Moana.

 

ERA Entertainment Chart 2017
Position Category Title Artist Company Units sold
1 Albums Divide Ed Sheeran Warner Music 2,702,839
2 Video games FIFA 18 Electronic Arts 2,696,721
3 Video games Call of Duty: WWII Activision Blizzard 2,442,416
4 Video Beauty and The Beast (2017) Walt Disney Studios Home Entertainment 1,484,565
5 Video Rogue One – A Star Wars Story Walt Disney Studios Home Entertainment 1,380,402
6 Video Moana Walt Disney Studios Home Entertainment 1,293,787
7 Video Fantastic Beasts and Where to Find Them Warner Home Video 1,279,850
8 Video games Grand Theft Auto V Take 2 1,080,022
9 Video Bridget Jones’s Baby Universal Pictures Home Entertainment 1,052,753
10 Albums Human Rag’n’Bone Man Sony Music 1,001,913
11 Video Guardians of The Galaxy – Vol 2 Walt Disney Studios Home Entertainment 873,825
12 Video Trolls 20th Century Fox Home Entertainment 872,586
13 Video Sing Universal Pictures Home Entertainment 805,342
14 Video Dunkirk Warner Home Video 753,429
15 Video games Assassin’s Creed Origins Ubisoft 679,965
16 Video games Destiny 2 Activision Blizzard 673,551
17 Video games Star Wars Battlefront II Electronic Arts 658,814
18 Video games Crash Bandicoot N.Sane Trilogy Activision Blizzard 651,354
19 Video Despicable Me 3 Universal Pictures Home Entertainment 631,748
20 Video Logan 20th Century Fox Home Entertainment 614,631
21 Video Doctor Strange Walt Disney Studios Home Entertainment 612,745
22 Albums Now That’s What I Call Music 96 Various Artists Sony Music/Universal Music 601,906
23 Albums Now That’s What I Call Music 97 Various Artists Sony Music/Universal Music 595,547
24 Video Wonder Woman Warner Home Video 591,316
25 Video games Tom Clancey’s Ghost Recon: Wildlands UBISOFT 574,889
26 Albums Now That’s What I Call Music 96 Various Artists Sony Music/Universal Music 560,286
27 Video Spider-Man – Homecoming Sony Pictures Home Entertainment 551,227
28 Video Pirates of The Caribbean – Salazars Walt Disney Studios Home Entertainment 538,735
29 Video The Girl on The Train 20th Century Fox Home Entertainment 525,996
30 Video La La Land Elevation Sales 525,342
31 Albums The Thrill of It All Sam Smith Universal Music 501,952
32 Video The Boss Baby 20th Century Fox Home Entertainment 501,453
33 Video Fast & Furious 8 Universal Pictures 500,617
34 Video The Lego Batman Movie Warner Home Video 494,446
35 Video games Gran Turismo: Sport Sony Computer Ent. 484,933
36 Albums Glory Days Little Mix Sony Music 468,173
37 Video Fifty Shades Darker Universal Pictures 466,119
38 Video Hacksaw Ridge Elevation Sales 465,138
39 Video games Horizon Zero Dawn Sony Computer Ent. 456,374
40 Video War For The Planet Of The Apes 20th Century Fox Home Entertainment 435,440