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UK digital video revenues beat out physical discs in 2016

It's the first time streaming and download services made more money than DVDs and Blu-rays.
Jamie Rigg, @jmerigg
01.06.17 in AV
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It was only a matter of time before the convenience of video streaming services and digital download stores took its toll on sales of DVDs and Blu-rays. And according to a new report from the UK's Entertainment Retailers Association (ERA), the scales tipped in 2016, with revenues from digital video exceeding that of physical discs for the first time.

Based on data from The Official Charts Company, total sales of DVDs and Blu-rays declined by 17 percent year on year, dropping from over £1 billion in 2015 to £894 million last year. Digital revenues, on the other hand, grew by over £250 million to a total of over £1.3 billion in 2016, according to estimates from market research firm IHS.

It's not hard to understand why people are spending more money on streaming services and digital downloads than ever before. Companies like Netflix and Amazon are investing heavily in big-budget original content, much of which is favourably reviewed and prime for binging. The past few years have also seen the advent of several new, specialist on-demand services like DisneyLife, and Hayu for reality TV addicts.

In addition, digital buy and rent services like the Sky Store, TalkTalk TV Store and Wuaki.tv mean you no longer have to leave the house and snag a physical disc to watch the latest releases in your living room. Taking all of this into consideration, it's no shock that revenues have now surpassed those of physical media.

The ERA report also documents the continued, explosive growth of music streaming services. The British Phonographic Industry (BPI) said earlier this week that the number of audio streams served in 2016 hit 45 billion, a 68 percent increase on the previous year. Putting this into cold, hard cash, the ERA confirmed a nigh-parallel 65 percent increase in the revenues of these services last year. Both reports detail similar declines in the number of music downloads and CD sales year on year, with vinyl the physical format darling after record sales went up by more than 50 percent in 2016.

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