Digital sales of music, games and films have broken the £1 billion barrier for the first time, according to new figures.
Research by the Entertainment Retailers Association (ERA) shows shoppers spent £1.033 billion - an 11.4% rise - on downloads, with video games accounting for more than half that figure with sales of £552.2 million.
Physical sales of CDs, DVDs, Blu-ray and videogames still account for more than three quarters of the entertainment market, but sales fell by 17.6% compared to 2011.
ERA director general Kim Bayley said: "Breaching the £1 billion barrier is an incredible achievement for the UK's digital entertainment retailers and reflects their huge investment in new and innovative services which means you can buy music, video and games literally at any time of the day and wherever you are.
"At the same time I suspect 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."