Britain goes pay monthly, as access trumps ownership
James R | On 07, Mar 2017
Britain has gone pay monthly for the first time, as digital media booms, with access trumping ownership.
According to the Entertainment Retailers Association, spending on access to entertainment via subscription services like Netflix, Spotify and apps like Pokemon Go has exceeded that on ownership models, such as discs or permanent download, for the first time.
The figures are included in the latest edition of the ERA Yearbook published today, which shows that access services accounted for 51.3 per cent of entertainment expenditure in 2016 with 48.7 per cent spent on discs and downloads.
One key factor was a boom in music and video streaming services.
Despite the broader trend, affection for physical formats still remains strong. Music fans remain devotees of ownership formats, in particular, with sales bolstered by the boom in vinyl (up another 54.4 per cent in 2016 to £65.6m) and deluxe CD and box set editions.
Even in previously declining markets, the introduction of a hot new product can generate substantial new physical sales, notes the ERA. The handheld games software market saw a surprise sales boost in the fourth quarter of 2016 after Nintendo released two new Pokemon titles for its 3DS handheld. With each selling around a quarter of a million units, it was enough to see the entire sector grow by more than 20 per cent compared with 2015.
Nonetheless, the broad trend is still swinging into subscription territory.
“We are seeing the rise of a pay monthly generation in entertainment,” says ERA CEO Kim Bayley. “Rather than buying music, video or games outright, the British public is being won over by rental or all-you-can eat services which are available 24/7. If downloads represented the first digital revolution in entertainment, we are now at digital 2.0, the subscription age.”
The figures follow the ERA’s data the start of the year, which showed investment by digital services such as Spotify, Sky, Amazon, Apple Music and Google resulted in sales of music, video and games running £1bn ahead of where they were just four years ago.
Online and mobile-generated digital and home delivery entertainment revenues accounted for 77.7 per cent of the £6.32bn spent on music, video and games, with physical stores accounting for just 22. per cent.
As a result, the entertainment business has reached a “new tipping point”, with Britons now spending nearly 80 pence in their entertainment pound online.