UK entertainment consumers flock to online video
Joseph O'Halloran | 12-03-2014

Booming subscription sales by services like Netflix and LOVEFiLM are at the vanguard of a revolution in the way content is consumed in the UK says the latest Entertainment Retailers Association (ERA) Yearbook.

The survey found that despite the numbers of outlets stocking music and video reaching an all-time high, and independent retailers ‘thriving’, digital access services such as streaming online video are on a roll, accounting for just over a quarter (26%) of the entertainment market in 2013. Overall Internet-derived sales — including home delivery, digital download and streaming and other access services — accounted for three-fifths of the £5.3 billion market in 2013. Looking at the video market as a whole, in 2013 physical stores were responsible for sales of £1.0195 billion, while online drove £1.0401 billion of revenue.

ERA calculated that video subscription services’ total revenues grew by 120% in 2013, and that in total, access models grew 35.6% in 2013 to reach £1.377 billion, just over a quarter of the entire entertainment market.

"This is stark evidence of the revolution in entertainment consumption being driven by entertainment retailers,” said ERA director general Kim Bayley. “The fact that 60p in the entertainment pound is now spent online and 26p in the pound is for access to content rather than ownership is a testament to the huge investment and technological ingenuity of retailers in providing consumers with new ways to enjoy the music, video and games they love."

Among the key companies driving this revolution, said ERA was Netflix with reportedly more than two million UK subscribers and BSkyB which it said confirmed the convergence of broadcast and retail models with the launch of its NOW TV over-the-top (OTT) streaming service to complement the Sky Store and Sky Go.