Kantar Worldpanel - www.kantarworldpanel.com

HMV becomes UKs largest physical music retailer again

01/11/2016

The latest data on the physical entertainment market from Kantar Worldpanel shows HMV has overtaken Amazon in the 12 weeks ending 25 September to become the UK’s largest music retailer, attracting 41,000 new shoppers and growing its share of the overall physical entertainment market by 3.1 percentage points. Since going into administration three and a half years ago, HMV has only reached a share this high once before. That instance was earlier this year when performance was boosted by its January sale.

Fiona Keenan, strategic insight director at Kantar Worldpanel, comments:
“HMV’s growth has been driven in large part by its success with several big music titles: two thirds of all sales of the critically acclaimed debut album from Christine and the Queens came via the retailer, and HMV also benefited from the ongoing success of Adele’s 25. A full year after its release, Adele’s 25 remains the top-selling artist album in the charts. It was also HMV’s bestselling album in the past 12 weeks, with the retailer capturing 29% of all sales.

“Meanwhile Amazon has seen a less positive performance in the latest quarter as 14% of its shoppers left the physical music market. It’s likely we’ll see this decline accelerate in the coming months as Amazon places greater focus on its digital offer. Amazon Music Unlimited is scheduled for launch in early 2017, and the new Amazon Echo will play a crucial role in the success of the retailer’s streaming service. With Black Friday just around the corner, strong promotional activity is likely to boost sales of the new device, persuading even more of Amazon’s customers to make the switch to digital.”

Now 94 was the bestselling album in the latest quarter. Although it was the only music title to make it into the top 30 entertainment products, the category once again performed better than any other entertainment sector. Artist albums grew by 4.2% year on year, now representing 78% of the physical music market with Adele, ELO and Coldplay holding onto the three top spots.

The games market continues to struggle in the face of ever-increasing competition from digital: sales of digital games grew by 12% in the latest quarter, now accounting for 48% of the market and almost overtaking physical games in value for the first time. Despite the tricky conditions, Argos continues to perform well, growing its market share by 4.1 percentage points to hold 15% of the market and overtaking Tesco to occupy the third spot overall. GAME, however, remains the firm market leader, increasing its market share by 1 percentage point year on year.

Fiona Keenan explains: “Physical games are certainly having a tough time at the moment, but the advent of 4K gaming – including the PS4 Pro and Xbox One S – could give the sector a much-needed boost. Not only is this new generation of games likely to come at a higher price point, but the rise of virtual reality – as signalled by the launch of the PSVR and Microsoft’s upcoming Project Scorpio – could attract new shoppers beyond the stereotypical young male gamer. Nintendo’s new Switch console, which we should see in the first quarter of 2017, also looks set to appeal to a wider audience and could reinvigorate the sector just as the Wii did ten years ago.”

A fall in shopper numbers continues to affect physical video, but it’s not all bad news. A varied release slate has meant that shoppers are buying more frequently, helping to slow the decline: HMV, Sainsbury’s and Zavvi all managed to encourage consumers to buy videos more often during the past 12 weeks.

Fiona Keenan comments: “Blu-ray’s share of video sales grew by 20% during the quarter, higher than at any point in 2015, as DVD continued to decline. Sales of Blu-ray were up 12% year on year – helped by big action releases particularly well-suited to viewing in high definition, including Batman v Superman and Captain America: Civil War. Sainsbury’s was the big winner in Blu-ray, growing sales by almost a third, while HMV also grew ahead of the market with this format – up 14% year on year.”

The latest data on the physical entertainment market in the UK for the 12 weeks ending 25th September 2016

The latest data on the physical entertainment market in the UK for the 12 weeks ending 25th September 2016

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Fiona Keenan

Strategic Insight Director - UK

 

+44 (0) 208 967 4590

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