Decline of physical entertainment market slows down - but music downloads, DVDs, hybrid toys, portable console gaming and boxed PC games continue to decline unabated.
While total revenues from digital video content are surging, the physical market lost 18.7% year-on-year. It’s however too soon to ring the death knell for DVD, demonstrated by a 15% growth in animated films – helped by Q2’s bestseller title Vaiana – and now replacing ‘action/adventure’ as the second bestselling genre behind a more generic ‘drama/romance’.
Although the transition from DVD to Blu-Ray got caught short by streaming, Blu-Ray sales, in particular, are limiting their loss to 7.6%. Despite still only representing 23% of total physical video revenues, certain bestseller titles have shifted towards Blu-Ray. Star Wars/Rogue One on Blu-Ray for example, outsold the DVD version in the past quarter.
The digital growth is also continuing in the music market, with subscription revenues increasing by 40%. Combined with the resurgence of vinyl - up with 28% - and a CD format that is again holding off a double-digit decline, the 10% growth promises a slightly rosier future for the music industry.
The 6% decline of ‘tangible’ music in the second quarter was particularly felt at the grocers’, declining by 22% (compared to a 25% increase with the online sellers), which may be somewhat surprising since the CD is relying heavier on the big hits to boost sales.
In the 2.4% growth of the gaming market, Nintendo’s momentum with the Switch (accounting for a quarter of hardware sales), along with the continuing rise in popularity of point cards (+15%) and the surging peripherals market (no PSVR in Q2 2016!) compensate for the 25% decline in portable gaming and the halving of last year’s hybrid toys sales.
As expected, PC game sales are dropping ever more (-48% in the past quarter), while digital PC sales are taking precedence. With a 6.1% decline, boxed console games are struggling significantly less, as past quarter’s decline is mainly attributable to the lack of bestsellers matching up to last year’s Uncharted 4/ A Thief’s End. This is largely demonstrated by GTA V being the second best sold boxed console game of the past quarter, over three and a half years since it was released on PS3 and 360 (September 2013), and more than 2 years since it arrived on PS4 and Xbox One (November 2014).
Conrad Hayen – Senior Market Analyst Entertainment