Physical entertainment retailers must dramatically change their focus to avoid “terminal decline”


Physical entertainment retailers must shift “their focus to other areas of the retail market” to avoid collapse, according to GlobalData.

In 2019 the physical entertainment retail market, consisting of video, music and games categories, shrunk a further 21 per cent continuing its “terminal decline”.

As streaming services continue to decimate sales in many categories, GlobalData’s retail analyst Zoe Mills argues that retailers must focus on more sustainable markets and capitalise on areas where there is still demand for retail goods.

The rising number of streaming services mean that customers are facing more difficult decisions about where to invest their money, but retailers can use these market developments to their benefit.

“For example, Disney has removed most of its content from Netflix and Amazon Prime Video in anticipation for the launch of Disney+ later this year,” Mills explained.

READ MORE: Music streaming hit £1bn in the UK in 2019 amid huge declines in physical sales

“As a result, retailers should focus on Disney titles, promoting the keepsake nature of these items, and enabling shoppers to watch content that they may otherwise not have access to via subscription services.”

Factors like the reduction in the number of cars with CD players have also led to significant declines in physical music sales, which was the worst performing category last year.

Mills adds that retailers should therefore consider “reducing space in-store allocated to music, and allocating it to other sectors which have a more stable demand or on more trend-led items such as homewares or licensed goods topical to their specialism.”

Earlier this month figures from the Entertainment Retailers Association (ERA) showed that music subscription spend in the UK hit £1 billion for the first time ever in 2019 marking a whopping 31-fold increase from 2010.

According to the ERA’s chief executive Kim Bailey 80 per cent of all entertainment spend is now digital, while spending on physical formats has dropped an average of 20 per cent across all categories.

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