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Media & Entertainment: Struggling Entertainment market.


With a 7,6% decline in the fourth quarter of 2016, there’s no denying physical media sales keep struggling in the digital age.

Traditionally, the sales of physical home entertainment peak in the last quarter, and by representing 41% of the total year income, this wasn’t any different in 2016.

Fourth quarter sales may somewhat have softened the annual decline to -6,1%, but despite an(almost) new generation of consoles (PS4 Pro and Xbox One S), eagerly awaited blockbuster games (Battlefield 1, CoD and this year’s bestseller Fifa 17), the Retro Gaming hype (Nintendo NES Classic Mini) and Playstation’s first steps in Virtual Reality, this year’s gaming sales do simply not meet the expectations.

If one would not take into account the growing potential of gaming vouchers and peripherals (PSVR), and only consider “traditional” hard-  and software, the overall yearly trend would have even shifted towards a double digit decline.

Physical music sales in Q4 fail to equal last year’s success (remember K3, Adele and David Bowie), and decrease by 11%, transcending the year-on-year evolution which closes off at a decline of -7,2%. Despite album and track downloads declining at an even faster pace (-17%), digital music keeps compensating for the physical loss, just ensuring a status quo in Q4. The total year-on-year trend for both physical and digital revenues combined, is estimated to grow almost 7%.

For the ninth consecutive year, overall Dvd and Blu-Ray sales are declining. As of 2016, the market has declined about 65% from its peak in 2008, when it was still worth almost 236 million €. In 2016, Dvd and Blu-Ray sales further demise, resulting in a 13,4% annual decrease in consumer spending, only to have worsen in Q4, with a decline of 15%. What is particularly striking, however, is that this loss is entirely situated in Back Catalogue, as New Release only decreases with 0,5% compared with last year.

Conrad Hayen – Business Analyst Media & Entertainment


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