Sales of digital media passed £1bn in 2012 as downloads of music, films and games rocketed on the back of the growth of tablets and smartphones.
The figures from the Entertainment Retailers Association (ERA) show that sales hit £1,033bn in 2012, up 11.4 percent over 2011.
This was driven by sales of films and videos, which grew 20 percent year-on-year and music downloads which rose 15 percent. A full breakdown of sales by each media type and their rise over the year is shown below.
While films and music have seen notable growth, helped by the growing popularity of downloading content to portable media devices, particularly tablets which reached low price points in 2012, gaming still accounts for the bulk of downloads.
However, Kim Bayley, director general of the ERA, said sales of music may well be higher as not all data from popular services is currently available.
"The combination of a myriad of exciting new devices and compelling new digital retailing services is clearly exciting consumers," she said.
"What is most striking is that these figures do not even include the impact of streaming services like Spotify, Deezer, We7 and Rdio, for whom full market value data is not yet available."
Nevertheless sales of physical products remain resilient, with 62 percent of all music sales CDs and video games at 65 percent.
"I suspect that many people will be surprised to learn just how resilient the physical business still is - with three quarters of entertainment sales still on disc.
"Downloads offer convenience and portability, but people still seem to value the quality and tangibility of a physical product," added Bayley.
Jim Killock from the Open Right's Group said the growth of sales proved there is demand for legitimate access to digital media and this should be the focus of media company's future strategies, rather than heavy-handed legal demands.
"Digital growth is great, but it's clear that film companies in particular need to move quickly to fulfil consumer demand," he told V3.
"Bringing products to market, not sledgehammer copyright enforcement, is what will improve the fortunes of the music and film businesses."
Dan Worth is the news editor for V3 having first joined the site as a reporter in November 2009. He specialises in a raft of areas including fixed and mobile telecoms, data protection, social media and government IT. Before joining V3 Dan covered communications technology, data handling and resilience in the emergency services sector on the BAPCO Journal.