Reflecting the continuing weakness in the UK's economy, the value of the overall video entertainment sector in the first half is down 6.8% - £898.7m in the first six months of 2012 down from £963.8m in the first six months of 2011. Unlike the DEG market report, UK figures do not include digital subscription services. These H1 2012 figures have been released by the British Video Association, following the publication of the Digital Entertainment Group's video performance data for the US market.

Compared to the worsening economic output at the end of Q2 - down 0.7% rather than the expected -0.3%, according to ONS - the UK retailing sector in general is holding up reasonably well, down 0.1% in the second quarter, due probably to unseasonably wet weather and the squeeze on incomes, according to the BVA.

The first half of 2012 has seen a significant increase in digital video spending in the UK, up 19.9% in the second quarter - from £62m in Q2 2011 to £74.3m in Q2 2012 - and 15.2% over the half year - from £130m in H1 2011 to £149.7m in H1 2012, according to IHS Screen Digest.

"The accelerating growth in digital expenditure demonstrates that more viewers are enjoying the benefits of video entertainment online," commented Lavinia Carey, Director General of the British Video Association. "This is unsurprising given the increasing number of digital services being introduced through TV- and internet-based platforms and the continuous innovation taking place in consumer electronics which make it ever easier to access these services at home and on the move."

Physical sales and rentals still make up the overwhelming proportion of the market, however, amounting to 83% of consumer spend on video year-to-date. Physical retail and rental totals amounted to £749m in the first half of 2012 (IHS Screen Digest/Kantar Worldpanel/BVA).

Carey added, "The majority of the population still prefer buying discs and although it?s tough out there, this is the most valuable part of the audio-visual industry, on which the film and TV sector also depend to finance future productions."

Story filed 30.07.12