Digital sales hit £1bn as CDs and DVDs in decline

BRITISH consumers spent more than £1bn on downloads of films, music and games in 2012, as sales of CDs and DVDs declined.

Industry data released yesterday showed that digital entertainment spending rose by 11.4 per cent last year to reach a record £1.033bn.

However, this growth did not make up for a decline in CD and DVD sales.

Total entertainment sales fell from £4.8bn to £4.2bn in 2012 as physical sales fell by 17.6 per cent, figures from the Entertainment Retailers Association (ERA) showed.

The ERA attributed the overall drop in sales to a relatively weak release calendar for films and videogames in 2012. However, the figures did not include spending on music and film streaming services such as Spotify and Netflix, which have grown even more rapidly than downloads over the last year.

Record industry body the BPI said yesterday that UK listeners had streamed more than 3.7bn tracks in 2012 – 140 in each household.

Despite digital’s inexorable growth and the high street’s struggles, physical sales still make up for around three-quarters of spending. DVD and Blu-Ray still dominate film sales – the most lucrative of the three sectors – with 94 per cent of spending, while physical music sales still account for 62 per cent.

Just over half of digital spending was on videogames, with many consumers downloading games straight to their consoles or playing online titles such as the wildly popular World of Warcraft.

Video is the least mature of the digital markets but grew by more than a fifth, a trend that could be explained by the increased use of tablet computers and internet connected televisions to watch films.

“Breaching the £1bn barrier is an incredible achievement for the UK's digital entertainment retailers,” ERA director general Kim Bayley said.

The BPI revealed that British artists dominated the charts last year. The three bestselling albums were from Brits, with Emeli Sandé’s Our Version Of Events taking the top spot.