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Verdict Research says gaming enabling music retailers to succeed

By | Published on Thursday 6 November 2008

HMV

New research from London based retailer experts Verdict Research reckons that high street music stores like HMV and Zavvi will be successful in turning round their businesses, though mainly thanks to the continued boom in video game sales. The new Verdict report reckons that video game sales will grow 42% this year to be worth £4.64 billion, while music and DVD sales together will only come to £4.46 billion.

Music Week quote Verdict analyst Malcolm Pinkerton thus: “Though the music and video sector has enjoyed a boost from the rapidly growing digital download market, general trading conditions remain challenging. Music is suffering from piracy, a continual onslaught of price deflation, intensifying competition and the ongoing decline of physical format CDs. While the DVD market has shown robust volume growth, value growth is impaired by falling prices and heavy discounting”.

Entertainment retailers are succeeding by diversifying out of music and DVD, Pinkerton says: “The two specialists [HMV and Zavvi] have made a point of diversifying their offers, cutting back on space in music in particular and re-allocating it to more lucrative areas such as MP3 players, books, clothing and video games”.

The Verdict Research backs up a recent report from the Entertainment Retailer’s Association, formerly the British Association Of Record Dealers, which was optimistic about the near future of entertainment retail but admitted music retailers were only succeeding when they expanding out of music.



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