Outlook brightens for sales of physical entertainment
New data has revealed a brighter picture for the physical entertainment market in the 12 weeks ending 5 July with several key retailers growing in value on last year and the rate of decline slowing to 3%.
The latest data from Kantar Worldpanel shows that Tesco, Amazon, GAME and Argos all saw an increase in sales and between them brought in an additional £8.5 million to the market.
Fiona Keenan, strategic insight director at Kantar Worldpanel, said: “The physical entertainment market’s decline of 3% year-on-year is a positive sign – last year growth was down by 7% in the second quarter. Games have been the strongest performer over the last quarter, supported by sales growth in software for the current generation of consoles. Performing particularly well is GAME, which has increased its market share within the sector to 31.7% from 29.1% last year. It continues to be the preferred choice for owners of the Xbox One and PS4, taking 36.5% of their combined software sales.”
Kantar found that the video market improved in the period with a value decline of 3.6% compared to a drop of 9.5% last quarter. Amazon and Tesco were the major winners, taking 42.5% of the market between them. Tesco was also the strongest performer for the period’s biggest release – The Hobbit: The Battle of the Five Armies – securing over a quarter of the title’s physical sales.
Kantar said that Amazon and Tesco are now “clearly ahead” of HMV in the video market despite the three being level this time last year. Meanwhile, Asda saw the largest decline in the video market with its market share falling from 15% to 11.7% year-on-year, following a move to an £11 price point on new release DVDs.
Despite strong growth in the first quarter of the year, the physical music declined in the second quarter of 2015. Asda, Morrisons and Sainsbury’s collectively lost over £3 million in value year-on-year, due in part to a lack of big-name album releases to match Coldplay’s Ghost Stories, which came out in May 2014.
While HMV saw declines across both video and gaming, it held its value for physical music, helped by new releases including English Graffiti by The Vaccines and How Big, How Blue, How Beautiful, the third album from Florence and the Machine.
Kantar said the importance of smaller retailers to the physical entertainment market continues to grow, with their contribution worth £47.7 million – up by £4.3 million from last year. Grainger Games has benefited from the strong results for games with its share in the sector up to 2.6% from 1% last year, while Zavvi’s share of online physical entertainment spend has increased from 3% to 3.5% due to the continued growth of the online market, which now stands at 34.7%.
