How do you most like to spend your evenings and weekends? Curled up on the sofa reading a good book? At the movies with friends? Playing an exciting new computer game? Over the last year, Germans spent nearly €10 billion on entertainment products. Books proved to be particularly popular, and increasingly not just as paperbacks, but also more and more commonly as eBooks. Digital entertainment in general is quite obviously gaining ground in Germany.
Whether it is a classic novel, a blockbuster at the movie theater or on DVD, a CD or PC game, Germans are happy to spend money on their entertainment. They have invested more than €9.5 billion in such products over the past 12 months. Sales in the entertainment industry have been relatively stable for many years now, but a comparison of individual categories reveals some slight shifts since 2007. However, the place of books on the market has remained stable, and they still account for the lion's share of sales. As was the case six years ago, around 44% of all entertainment spending was attributable to crime thrillers, guides and other reading material in 2013. These are insights from the latest GfK Consumer Panels Media*Scope on the development of the entertainment market. In this panel, around 25,000 individuals regularly report on their purchases of books, electronic games, movie theater tickets and other similar spending.
While the predicted demise of the book was evidently some way off the mark, the music industry has seen a decline of three percentage points since 2007. CDs, downloads and audio books for children lost a significant share of their market power in value terms, a development that is likely to give the industry cause for concern. However, it would be entirely incorrect to assume that this means Germans have lost their interest in music over the years. Instead, the music industry is clearly undergoing a period of transformation, away from traditional, cost-intensive sales formats to more affordable downloads and streaming. In contrast, the share of electronic games, bought and rented DVDs has remained stable since 2007, with the slice of the entertainment pie remaining relatively constant. Movie theater visits, in particular, saw an increase in market share on the figure six years ago.
Not all Germans contribute equally to the positive book market sales result, with female readers, in particular, boosting the figures. Almost 60% of spending on books is accounted for by women. In contrast, men buy more computer games (70%), music and DVDs (around 60% each). It is only visits to the movie theater where parity between the sexes is evident, even if women do go to see the odd one or two films more than men.
Preferences for entertainment are not just determined by gender, as age also plays a decisive role in which products are purchased. For example, books are predominantly popular with middle aged and older Germans. At 35%, the highest share of spending is attributable to the generation aged 60 plus. As might be expected, a different picture emerges for computer games. More than a quarter of the overall budget in this category is down to young adults aged between 20 and 29, and the same again is attributable to even younger players in the 10 to 19 age group. Despite there being a vast range available to watch at home, younger Germans still prefer to go out to the movies today. Relaxing with popcorn and a soft drink watching films on the big screen is more favored as a leisure activity among this generation than is the case for older Germans. Of overall spending in movie theaters, the 20 to 29 age group accounts for almost one quarter of all sales, while those aged over 60 only contribute 11%, although the latter share is registering strong growth.
The famous Roman rhetorician Cicero apparently once said: “If you have a garden and a library, you have everything you need.” Luckily keen readers today no longer necessarily need to have a library as eBooks can be easily downloaded, and save space. In general, digital entertainment is becoming ever more popular among Germans. Spending on such products increased by almost €140 million to €827 million between 2012 and 2013, which equates to a rise of nearly 20%. Sales have even increased by 86% when compared with 2011. Sales of digital entertainment have therefore risen to generate around 10% of all spending on the entertainment products included in the study. If this trend continues, the billion-euro threshold is likely to be exceeded in the next one or two years. Games for smartphones and tablets, music as MP3 or in comparable formats and online videos have long-since ceased to be niche products. Today, 20% of Germans over the age of 10 buy digital entertainment products, up from 15% in 2011. They are also investing more and more money in these products. In 2011, the average spend on digital entertainment products was in the region of €44, but this had risen to €61 last year.
Music continues to hold on to the greatest sales share on the digital market, with almost a third of spending booked in this segment. Despite this, sales growth in the category has stagnated, which is in all probability due to the availability of new services, such as music streaming. In 2013, Germans spent a total of €274 million on digital music. While this is still an increase of €5 million on the previous year's figure, this is very low when compared with the sales growth achieved in other categories. In contrast, the digital book market reported a massive rise in sales. In 2013, Germans were considerably more likely to get out their wallets to buy eBooks, spending €165 million overall, which means sales in this category grew by more than €60 million, or 60%, in 12 months.
The pace of digitization varies throughout the entertainment industry. The share of overall sales accounted for by digital products is already 33% for rental films and programs and 22% for music. More than one in five euros spent by music lovers today is on digital content. The only other segment that has achieved a double-digit sales share for digital content is games, at 14%. Despite the huge advancement of eBooks, the majority of books are currently still purchased in print and the digital share of this category is only 5% at present. When it comes to the best format, whether tangible or digital, there is a difference of opinions, or rather genders. In line with the cliché, men are the bigger fans of technology and account for a greater sales share of the digital market than women, at 12% and 7% respectively. They are particularly far ahead when it comes to games and purchasing digital videos.
With regard to different age groups, it comes as no surprise that younger Germans are generally more open to digital entertainment products than the average. At around 15%, the sales share is greatest among the 20 to 39 age group. By comparison, for consumers over the age of 60 it is only 3%. Interesting differences emerge when looking at the individual categories: digital music particularly appeals to teenagers and young adults. Those who grew up with MP3 downloads and streaming services are more likely to turn to these new formats, especially because building up a physical collection on the shelves is often more expensive than a download music library. The sales share of the 10 to 19 age group in the digital music segment is an above-average 37%. However, when it comes to reading material, older consumers are also more likely to opt for the digital format. In this segment, the largest sales share is attributable to those aged between 20 and 49. The 30 to 49 age group is ahead in regard to renting videos digitally.
The range of entertainment products available to Germans today is as diverse and different as their tastes. We have a choice between digital and physical items, anyone can download a classic novel or burn the latest chart hits to an old fashioned CD. People can enjoy streaming films and series in their spare time, or spend their evening in a more traditional way at the movie theater with friends. It is probably not all that important what type of entertainment anyone opts for at weekends and in their spare time. For the musician and author Werner Friebel, only one thing was important: “Good entertainment is anything that develops and nourishes the heart and mind.”
Data source: GfK Consumer Panel Media*Scope (25.000 inviduals aged 10 years and above)
If you have any queries please contact Bianca Corcoran-Schliemann, GfK SE, Simone Zinner, GfK SE, or Claudia Gaspar, e-mail: firstname.lastname@example.org.