Weak Release Schedule Blamed For 12% Drop In U.K. Entertainment Market; Music Sales Fell $90 Million In 2012
Entertainment Retailers Assoc.

Combined sales of music, video and games products in the United Kingdom fell 12% in 2012 to £4.21 billion ($6.26 billion), with music sales declining by £59 million ($87.8 million) from the previous year, according to the annual Entertainment Retailers Association (ERA) Yearbook, published today (Mar. 12).

ERA director general Kim Bayley said that “a combination of structural change and one of the weakest release schedules on record,” was to blame for the 12% slide in total entertainment sales, which dropped from £4,79 billion ($7,12 billion) in 2011 to last year’s total, £4,21 billion ($6.26 billion).

Total music sales in 2012 fell to £1.01 billion ($1.499 billion), down from £1.07 billion ($1.59 billion) the previous year. In terms of volume sales, 125 million music units (including music videos and digital) were sold in 2012, down from 139 million the previous year -- a 9.7% year-on-year fall, according to the ERA. Video sales declined by £178 million ($265 million) in 2012, while the overall games market slipped by £336 million ($500.1 million).

In total, the U.K.’s population of 62.3 million spent an average of £9.06 ($13.49) less per person on entertainment products than the previous year, according to the ERA, utilizing data supplied by the Official Charts Company (OCC), GfK Chart-track and IHS Screen Digest.

“2012 suffered from a weak schedule across all entertainment formats,” said Bayley in a statement accompanying the report. “It was a particular blow to specialist entertainment retailers who are reliant on the quality of the product they are delivered.”

The ERA Yearbook goes on to state that just two music titles -- Emeli Sande’s Brit Award-winning debut Our Version of Events and Now That’s What I Call Music 83 – moved over 1 million units in 2012, compared with 5 the previous year. The impact of last summer’s Diamond Jubilee celebrations and the London 2012 Olympic Games are, meanwhile, cited as a contributing factor in entertainment companies focusing key releases on the pre-Christmas period. Across the entertainment market as a whole, the Top 40 biggest-selling music, video and games titles in 2012 sold a total of 36.9 million units, a 25% fall compared with 2011’s equivalent Top 40.

3.7 Billion Streams in the U.K. in 2012

There was, however, far more positive news in the ever-growing digital market, which is making strong inroads into the U.K. mass market. Thanks to the proliferation of streaming services such as Spotify, Deezer, Rdio and Napster, among others, 3.7 billion streams were delivered in the U.K. in 2012, a 40% rise on the previous year and equivalent to the total number of singles sold in the U.K. over the past sixty years, according to the OCC.

Meanwhile, digital music retailers, such as iTunes, 7Digital and Amazon, increased their sales of music downloads by 15.1% year-on-year, rising from £333 million ($495 million) in 2011 to £383 million ($569 million) in 2012. Digital videogame sales increased 7.7% from 2011, while digital video sales grew 20.3%. As reported in January, combined digital sales of music, videogames and video exceeded £1 billion for the first time in 2012.

“Digital retailers and service providers are leading a revolution in the entertainment business. Building on the success of download stores, streaming services are changing the music landscape,” commented Bayley.

In addition to reporting on the overall U.K. entertainment market, ERA’s annual yearbook also provides a good snapshot of the changing face of the U.K. retail market. In line with the migration to digital services, sales of entertainment products (music, video and games) through brick and mortar stores fell 18.5% to £2.28 billion ($3.39 billion) in 2012, down from £2.80 billion ($4.16 billion) the previous year. Brick and mortar music sales in the U.K. in 2012 totaled £446 million ($663 million), down 13.7% from £517 million ($767 million) in 2011.

Internet retail physical music sales, such as those provided by Amazon’s mail order service, also fell, dropping 17.8% to £177 million ($263 million), down from £215 million ($320 million) the previous year.
In contrast, digital sales of entertainment increased by at least £106 million ($158 million), not including music streaming retail data, which is not yet available, according to the ERA.