Streaming services Netflix, Amazon Prime and Disney+ see boom as UK

Spending on subscription streaming services such as Netflix, Amazon Prime Video, Disney+ and NowTV soared by 28% to £3.16bn in the UK last year.

Overall spending on entertainment, which covers digital and physical video, music and gaming – including sales of CDs, DVDs and video games – rose to £9.7bn in 2021, up by 4.6% from 2020, according to preliminary figures from Entertainment Retailers Association (ERA).

“The entire sector was braced for revenues to settle down in 2021 after 2020 grew an astonishing 18.7%, but growth continued – for the ninth successive year,” said ERA CEO Kim Bayley said.

“Strikingly this growth is increasingly independent of new release activity; the vast majority of this growth being driven by digital services making entertainment more accessible and convenient than ever before. If we can repeat this success in 2022, the UK entertainment market will exceed £10bn for the first time.”

Contrary to fears that 2020’s lockdown boom in streaming was a one-off, digital streams and sales continued to grow through 2021 with music revenues up another 8.7% and video up 13.3%.

Only games fell, with sales down 3.3%, but that was still nearly 14% more than in 2019, the last full year before coronavirus (COVID-19) pandemic struck, ERA said.

Nearly 90 pence in every pound spent on music, video and games is now online, the figures revealed.

Total digital revenues grew by 8.3% last year to £8.66bn, more than the entire entertainment market was worth just two years ago.

Overall physical revenues fell by 18.5% in 2021, although physical revenues in music, up 7.3%, grew for the first time since 2001, driven by the continuing boom in vinyl sales, which rose by 23.2% to £135.6mln.

The video streaming market in the UK has more than tripled in size since 2017 as more services launch and more users adopt them.

While video streaming increasingly generates its own hits – such as Netflix’s 2021 success ‘Squid Game’ – the ownership market of discs and downloads is heavily dependent upon theatrical success, ERA said.

It noted that the forced closure of cinemas during the pandemic and the subsequent delays in releases continued to hit this part of the video business hard during 2021.

With the notable exception of the latest James Bond epic ‘No Time To Die’, the physical disc and download-to-own businesses suffered significantly.

DVD, in particular, took a dramatic dive with revenues down 39.5% on 2020.

Bayley said: “Crises tend to amplify existing trends and the coronavirus pandemic has clearly been a significant factor in the explosive growth of video streaming and precipitous decline of disc sales.

“On the positive side, however, the reopening of cinemas and the significant backlog of Hollywood blockbusters means we can expect renewed growth in ownership formats in 2022.”