Thursday, 3 January 2013

Everything must go

Image: © Kipper Williams
Last year saw another landmark in the UK as sales of downloaded music, video and games passed the £1billion mark, a rise of 11.4% over the previous year. Half of these sales were video games although, interestingly, the fastest growing segment was video which rose by 20.3%. Certainly, the greater availability of broadband internet access and the proliferation of wireless networks and devices has made the dream of high quality video streaming a reality. Indeed, increasingly consumers are using streaming services such as Netflix, where they do not physically own the product - if one can say that about an electronic download, that is!

It has not been without casualties, however, as physical sales have fallen by 17.6% to £3.2bn. Following the disappearance of Woolworths from High Streets and the collapse into administration of, amongst others, Game Group at the end of last year, the available options for consumers are now really rather limited. HMV, whose shares have fallen from a high of around 270p in 2005 to the current price of just 1.85p, has found itself as almost the last man standing. Perhaps this will be its saving grace. For the record companies and game producers, having a physical presence on the High Street is important as a marketing tool and maybe they will step in to prevent the final shop window closing.

However, the seismic shift in consumer habits shows little sign of abating, forcing all retailers to re-examine their business models to ensure that they stay relevant at a time of such change.

Rob Burgeman
Divisional Director

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