U.K. digital sales grow 11.4%

Home ent. market falls 12% to $6.86 bil

LONDON

Digital sales of video, music and games exceeded £1 billion ($1.63 billion) for the first time in the U.K. last year, according to figures released Wednesday by U.K. trade org the Entertainment Retailers Assn.

However, despite the robust surge in digital sales, which grew 11.4% year-on-year to $1.68 billion, the overall entertainment market continued to decline. Combined sales of music, video and videogames dropped 12% from 2011 to $6.86 billion.

Digital format sales accounted for 24.5% of the combined entertainment market with physical sales representing 75.5%.

“Breaching the £1 billion barrier is an incredible achievement for the U.K.’s digital entertainment retailers and reflects the huge investment in new and innovative services,” said ERA director general Kim Bayley. “At the same time I suspect that many people will be surprised to learn just how resilient the physical business still is. Downloads offer convenience and portability, but people still seem to value the quality and tangibility of a physical product.”

Video showed the most growth in digital sales in 2012, up 20.3% to $159.5 million. Physical video sales fell 11.4% while the overall video market dropped 10% to $2.62 billion. Physical sales still account for 93.9% of the video market, down from 95.4% in 2011 but far healthier than the 62% for music sales or 65.4% for videogame sales.

Videogames remain the biggest digital sector with sales up 7.7% in 2012 to $899.9 billion, more than the combined digital sales of music and film combined. However, a 26.4% drop in physical sales meant videogames suffered the largest overall drop in 2012, slipping 17.4% from 2011 with a total value at $2.6 billion.

Digital sales of music, the most established of the three digital markets, grew 15.1% to $624.6 million. Physical music sales were down 14.9% with the overall market off 5.5% to $1.64 billion.

Full market value data is not yet available for streaming services.

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