U.K. Home Entertainment Revenue Rises for First Time in Five Years

Streaming services such as Netflix have helped boost U.K. home entertainment spending.

Demand for streaming video and music services from the likes of Netflix and Spotify boosted 2013 figures by 4 percent.

LONDON – U.K. home entertainment revenue rose 4 percent in 2013, marking the first increase in five years, Britain's Entertainment Retailers Association said Wednesday.

It cited growing demand for streaming video and music services from the likes of Netflix and Spotify that helped boost overall online sales, while physical revenue dropped 8 percent.

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Overall home entertainment spending, including spending on video, video games and music, in Britain hit $8.8 billion (£5.3 billion) last year, the group said. The U.K. sector had last recorded growth in 2008.

Online sales, including digital downloads, streaming, products for home delivery and other services, recorded a 13.9 percent revenue gain in 2013 to $5.3 billion (£3.2 billion), accounting for a 60 percent share of the market.

The biggest gain here came from subscription VOD services, such as Netflix and Amazon.com's LoveFilm, which grew 120 percent over 2012, according to the Entertainment Retailers Association. Music streaming revenue from the likes of Spotify and Deezer rose 34 percent.

Based on content categories, video games revenue rose 6.6 percent and video revenue rose 3.7 percent, while music sales declined 0.5 percent, according to the report.

The organization noted that 40 percent of U.K. consumer spending came for content access services rather than for ownership of content.

"This is stark evidence of the revolution in entertainment consumption being driven by entertainment retailers," said Kim Bayley, director general of the Entertainment Retailers Association, about the latest figures. "The fact that 60 [percent] in the entertainment pound is now spent online and 26…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."

She added: "The transformation of the entertainment market is often misrepresented either as some kind of force of nature beyond human control or as a far-sighted initiative of record and video and games companies. It is neither. The entertainment revolution has been driven by new and existing retailers taking huge gambles and investing in technology and new delivery mechanisms."

E-mail: Georg.Szalai@THR.com
Twitter: @georgszalai