Consumer spend on digital video and music streaming grew by double digits last year as sales of DVDs and other hard-copy formats sold on the high street plummeted.
The Entertainment Retailers Association’s annual consumer spend survey showed the popularity of streaming services such as Netflix, Spotify and Amazon Prime Video is continuing to increase, driving an overall 2.4% year-on-year growth in entertainment spend to £7.79bn in 2019.
Digital, including streaming, now makes up the vast majority of the UK’s total entertainment spend, which grew 9.7% last year to £6.38bn.
The divergence between online and offline entertainment spend is most apparent in music, where digital streaming increased by 23.5% and surpassed £1bn for the first time, while physical sales were down 17% to £318.1m.
Video sales show a similar picture: digital was up 21.5% to £2.1bn, while physical retail shrank by 22.6% to £477.2m. Video spend was up overall by 9.5% to £2.61bn, with Bohemian Rhapsody, Avengers: Endgame and Toy Story 4 the most popular titles.
However, consumer spend on video games (the UK’s biggest entertainment sector) declined last year by 3.4% to £3.77bn – the first year without growth since 2012. The ERA attributed this to an "inevitable" slowdown in sales as gamers waited for the launch of the new Sony PlayStation and Microsoft Xbox consoles in 2020.
Kim Bayley, chief executive of the ERA, said physical product retailers had a "tough time" last year, but that sales of music on vinyl and video on 4K ultra HD discs are still "buoyant".
She added: "The rise of digital entertainment services has created the biggest revolution in UK leisure habits in history, enabling people to access the music, video and games they love wherever and whenever they want and transforming the fortunes of record labels, filmmakers and games developers. The fact that in 2019 over 80% of entertainment spending was on digital services shows the scale of that revolution."