Video Killed the Radio Star

The pop video was thought to have dealt a mortal blow to the music industry in the 1980s (although it didn’t…) and here’s the latest chapter in the saga: after a dreadful couple of years for the record business it looks like UK sales of games will outstrip music and video for the first time in 2008, says a report from Verdict Research and reported by the BBC.

According to the report, a huge shift in consumer attitudes has turned video games into the UK’s most popular form of entertainment, and predicts spending on games will rise by 42% to £4.64bn in 2008, with sales on music and video at £4.46bn. In the last five years the video games market has more than doubled in value, while music sales have stagnated.

We’ve looked at the decline of the traditional record industry a lot in blogs over the last couple of years. Their real problem is not so much the growth of spending on gaming so much as a steep decline in spending on the record industry’s key product, the CD.

One note of caution in dealing with the figures: they may overstate gaming sales by including hardware (e.g. consoles). Even so, with sales of games software at £1.7bn, compared to £1.4bn in music sales and £2.2bn for video revenues the long term trend seems pretty clear.

As evidence, last word to Malcolm Pinkerton of Verdict who says firms such as HMV and Zavvi are changing store layouts: “They’re cutting back on space in music and re-allocating it to more lucrative areas such as MP3 players, books, clothing and video games.”