New ERA data also shows that entertainment has gone ‘pay monthly’ for the first time.
New figures from the Entertainment Retailers Association show that Britons now spend almost 80% of their expenditure on entertainment online.
On top of this, entertainment has gone ‘pay monthly’ for the first time – with spending on services such as Netflix and Spotify and apps including Pokémon Go exceeding that on permanent downloads or discs.
In 2016, online and mobile-generated digital and home delivery entertainment revenues accounted for 77.7% of the £6.32bn spent on music, video and games, with physical stores accounting for just 22.3%.
Just as significantly, ERA figures show that for the first time in 2016 Britons spent more on accessing entertainment via subscription services from Netflix, Amazon, Spotify, Google Play, Sky and Apple Music and mobile apps like Pokémon Go than they did buying it permanently on disc or download.
Access services accounted for 51.3% of entertainment expenditure in 2016, with 48.7% spent on discs and downloads. A key factor was booming expenditure on music and video streaming services.
ERA ceo Kim Bayley commented: “We are seeing the rise of a pay monthly generation in entertainment. Rather than buying music, video or games outright, the British public is being won over by rental or all-you-can eat services which are available 24/7.
“If downloads represented the first digital revolution in entertainment, we are now at digital 2.0, the subscription age.”
However, despite the trend, affection for physical formats still remains strong.
Music fans remain devotees of ownership formats, with sales bolstered by the boom in vinyl (up another 54.4% in 2016 to £65.6m) and deluxe CD and box set editions.
The handheld games software market saw a surprise sales boost in the fourth quarter of 2016 after Nintendo released two new Pokémon titles for its 3DS platform. With each selling around a quarter of a million units, it was enough to see the entire sector grow by more than 20% compared with 2015.
Entertainment overall posted its fourth successive year of growth in 2016, scoring its best year-on-year performance since 2000 to reach sales of £6,317.8m, up 3% on 2015. Games now accounts for nearly half of the entertainment market (46.8%), its highest share ever.
All the figures are included in the latest edition of the ERA Yearbook, which is regarded as the definitive statistical source on the UK games, video and music markets.
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