Online overtakes bricks and mortar in music for the first time

Growing sales of online and mobile downloads have combined with surging sales by home delivery services led by Amazon to put pressure on physical store outlets.

Digital and physical product bought online or via mobile now accounts for 32% of the video market and 45% of games. The most dramatic impact has been on the music market where for the first time in 2011, physical stores accounted for less than half of sales - 48.6%.

The ERA Yearbook contains full data on the UK games, video and music markets for
2011. It also highlights key innovations by entertainment retailers in driving
innovation in the market, including:

• HMV's listening post app
  which allows users to sample tracks from more than 100,000 albums simply by
  taking a photograph of the cover with their mobile phone;
• Orange's 'Swapables'
  tariff which gives users access to Deezer's streaming music service;
• Tesco's video locker
  service which automatically gives Clubcard users access to movies they buy on
  DVD on their PCs, Macs, PS3s and other devices.

Kim Bayley said, "Retailers know that innovation is key to maintaining consumer interest in
entertainment. That's why our members are investing heavily in new products and
services. The real innovation gap is in the physical market where our members
buy finished product from film and music and games companies. We will continue
to lobby them strongly to innovate too."