The Entertainment Retailer’s Association said that digital video revenues climbed by “an incredible” 22.8% year-on-year on 2016 to reach £1.309 billion.
By contrast, physical revenues were down 16.9% to £893.6m with both DVD and Blu-ray suffering double-digit declines.
Star Wars: The Force Awakens was the biggest-selling video of the year with sales of 2.3m units.
Across all types of entertainment – music, video, and games – digital accounted for the lion’s share of sales last year.
The ERA said that total digital, including streaming, revenues came to £4.124 billion, up 15.9% year-on-year. Physical sales were down 14.9% to £2.194 billion.
Overall music, video and games markets were found to have reached new all-time record sales of £6.3bn in 2016, up 3% on the previous year and over £1bn more than they were as recently as 2012.
“The music, video and games industries were understandably nervous about the advent of new digital services, but these figures provide resounding evidence of the benefits of our members’ investment in innovation,” said ERA CEO, Kim Bayley.
“To have added over £1bn in new revenues in just four years is an incredible achievement. To put it another way, take away today’s digital services and the entertainment market would be barely a third the size it is today.”
The ERA reached its market figures by aggregating data from market analysts including the Official Charts Company, GfK and IHS.
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