Downloads surge to £1billion

 By Matt Warman, Consumer Technology Editor

The Entertainment Retailers Association said that a quarter of the entertainment market is now digital. Although overall sales rose 11.4 per cent from 2011, hitting £1.03billion, sales of CDs, DVDs, Blu-ray and video games fell by 17.6 per cent.

Video games, which have a much higher retail price than CDs and DVDs, accounted for £552million, rising 7.7 per cent year on year. It was film, however, which rose most as download services such as Apple’s iTunes succeeded in persuading users to download video en masse for the first time. Sales rose 20.3 per cent to £98m, while music was up 15.1 per cent to £383m.

ERA director general Kim Bayley said, "Breaching the £1bn barrier is an incredible achievement for the UK's digital entertainment retailers and reflects their huge investment in new and innovative services which means you can buy music, video and games literally at any time of the day and wherever you are.”

He added, however, that physical sales would remain a major force for the time being. “I suspect that many people will be surprised to learn just how resilient the physical business still is,” he said. “Downloads offer convenience and portability, but people still seem to value the quality and tangibility of a physical product. It is clearly way too soon to write off the CD."

Although music streaming services, which allow users to play music from the internet, have seen significant growth in 2012, their contribution to industry revenues remains very small. Spotify reported 3.7billion streams from its servers to British subscribers in 2012, but has paid just £312m to musicians globally since its launch in 2008.

Jim Killock, Executive Director of the Open Rights Group, a digital consumer rights group, said “Better digital services are helping to boost the fortunes of cultural businesses online. Bringing products to market, not sledgehammer copyright enforcement, is what will improve the fortunes of the music and film businesses." /Telegraph