Have we surpassed the tipping point from ownership to subscription? The latest figures from the Entertainment Retailers Association (ERA) seem to support this- entertainment spending on subscription models outstripped money spent on physical and download formats in 2016 for the first time ever.
Streaming-based entertainment access models including Spotify and Netflix were worth £3.24 billion in 2016, 51.3% of the total expenditure and conveniently just over half. In addition, it was revealed that Britons now spend almost 80 pence in their entertainment pound online.
It is interesting to look at the distinctions between music, games and video in this area- the ‘access’ / subscription model now accounts for 56.6% of games, 51% of video yet only 37.8% of music, with ownership. In other words, games and video are leading the charge as music consumers hold onto physical formats. If only an industry newsletter had written a recent article outlining what the music industry might be able to learn from these adjacent sectors.
ERA CEO Kim Bayley said: “Digital may grab the headlines, but we should not underestimate the fondness of the UK public for physical formats in particular. While the vinyl revival has been well reported, millions of people still regard DVDs, CDs and console game discs as the best way to access entertainment. Discs are durable, convenient and are still probably the best entertainment option for gifting”.
Bayley added: “We are seeing the rise of a pay monthly generation in entertainment,” she added. Rather than buying music, video or games outright, the British public is being won over by rental or all-you-can eat services, which are available 24/7. If downloads represented the first digital revolution in entertainment, we are now at digital 2.0, the subscription age”.
As we’ve already explored elsewhere, the vinyl revival is a drop in the ocean but if anything, the above figures are troubling for streaming services, which have more comprehensive and less fragmented and transitory libraries of content, i.e they are closer as an offering, to the ownership model in comparison to the likes of Netflix and Amazon Video.
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