The data is in: Total physical and digital home entertainment sales in the UK surpassed £9bn in 2020, equivalent to 16.8% growth and driven by the coronavirus pandemic.
Video games alone generated revenues in excess of £4bn for the first time ever, with headline numbers from the Entertainment Retailers Association (ERA) particularly eye-opening in terms of where digitally-delivered video games are now placed in media revenue hierarchy.
The £4.2bn raked in by games represented an increase of 14.5% year-on-year (context: games became the UK’s single biggest entertainment industry back in 2013, when it overtook video).
Unsurprisingly, the largest single segment is the digital games business, which includes mobile games, streamed games and downloads. It grew by 16.3% to £3.6bn – worth more than the entire video market (£3.3bn) and twice as much as the music market (£1.5bn).
That said, physical games enjoyed a return to growth in 2020 too, with revenues up 4.6% to £598.5m. Put simply, increased games sales in generalduring lockdown – as well as new gaming consoles arriving in November – have driven this growth.
You can drill down into the data here, but we’ve been struck by how these numbers were foreshadowed by research we carried out with pop culture fans last summer*.
We found that the number of hours spent playing games had already increased markedly mid-year, with 33% of respondents saying they’d been playing games for more than 20 hours a week during lockdown, compared to just 14% pre-COVID.
And it wasn’t just to fill time. Almost two thirds (64%) said that connecting with others via online or multiplayer games had helped alleviate feelings of isolation.
The same pattern was evident in other home entertainment sectors, which had already seen consumption revolutionised by digital delivery. Streaming services in general were shown to be the favourite way for pop culture fans to view content during lockdown, with 90% opting for this format, compared to 4% preferring on-demand TV and just 3% choosing live TV.
And this was borne out in ERA’s year-end data, which shows that the digital video market grew by 37.7% in 2020 to hit £2.9bn, as viewers signed up en masse to the likes of Netflix, Disney+, Amazon Prime Video and Apple TV+.
While that figure includes digital rental and downloads, more than 80% of the total was taken by streaming services.
In contrast, with lockdown leading to the closure of many stores, sales of physical video formats such as DVD and Blu-ray were down a quarter to £355.7m.
Our own data indicated that veteran streaming service Netflix led the way during lockdown in terms of subscriptions, with a significant 92% of survey respondents accessing the service, followed by Amazon Prime Video at 72%.
It’s been well documented that Disney+ has enjoyed a fast uptake (if you haven’t seen The Mandalorian, what the heck have you been doing?!), with 62% of respondents subscribing to the service. In fact, 47% of our sample audience said that they had subscribed to Disney+ during lockdown (the service launched just as the pandemic was taking hold).
So, as we sit here in early January, what does the above mean for the rest of 2021? In the short to medium term, it’s entirely reasonable to expect the trend towards digitally delivered home entertainment to increase while we wait for global coronavirus vaccination efforts to bear fruit.
It will, however, be interesting to see if the pandemic impacts individual sectors in different ways. For example, the latest generation of games consoles will start getting a boost from long-awaited new and platform-exclusive titles, while we’re yet to see how COVID-related production postponements will impact demand for video services.
Longer term, we’re absolutely convinced, as evidenced by our own and third party data, that – in the face of the worst global crisis in living memory – our affinity and relationships with our favourite entertainment brands has grown stronger than ever.
How those brands can reengage physically with their fan communities as we emerge from our collective lockdown is something we’ll be exploring further in future blogs…
* We gathered data from 3,000 pop culture fans in the UK. 80% of the respondents were aged between 18 and 34 (48% were in the 25-34 year old category; 32% in the 18-24 category).
