Consumers spent 4x more on streaming services in 2019

Anne Freier

In App Business. January 7, 2020

UK consumers spent more than £1 billion on streaming music services in 2019, according to research published by the Entertainment Retailers Association (ERA), an association that represents digital music retailers.

That’s a 4x increase compared to 2014 and means that consumers have fully accepted streaming of music as a new mode of consuming music.

Indeed, music fans spent twice as much money to stream music than they did buying or downloading tracks (£122.6 million).

Digital entertainment including video and games rose 2.4% to £7.8 billion in 2019, whilst spending on physical formats dropped 21%.

“The rise of digital entertainment services has created the biggest revolution in UK leisure habits in history, enabling people to access the music, video and games they love wherever and whenever they want, and transforming the fortunes of record labels, filmmakers and games developers,” said ERA CEO, Kim Bayley.

“The fact that in 2019 over 80 per cent of entertainment spending was on digital services shows the scale of that revolution. There is no doubt retailers of physical product had a tough time in 2019, but physical entertainment was still a £1.4bn retail business. Sales of vinyl and 4K Ultra HD discs are buoyant and still growing and we still have huge hit phenomena like FIFA 20 which can sell 1.5m physical units at around £40 a time. Physical is down, but it’s definitely not out.”

This means that over 80% of entertainment spending is going toward digital formats.

Spending on video increased 9.5% driven by streaming platforms like Netflix and Amazon.

“Our latest research has shown that UK consumers watch almost 7 hours of streaming TV each week, but these consumers currently don’t have more than 2 subscriptions,” explains Gavin Stirrat, VP of partner services at SSP OpenX.

“An ad-funded model could be the answer to providing consumers with the content they want, without demanding more money from them. While that offers a clear benefit for consumers – commercially, it also offers streaming platforms a point of differentiation in what we can see is an ever growing, and already crowded market. In essence, it really could be a win-win opportunity.”

Games attracted some of the biggest revenue at £3.77 billion – although the figure represents a slight decrease of 3.4% from 2018. The launch of a new PlayStation and Xbox may have played a role in the slight dip.