Digital video revenues from the likes of Netflix, Sky, Amazon and Apple overtook DVD and Blu-ray disc sales for the first time in 2016.
Digital video revenues reached £1,309.3m in 2016, up an impressive 22.8%.
In contrast physical revenues were down 16.9% to £893.6m with both DVD and Blu-ray suffering double-digit declines.
The figures from the ERA (Entertainment Retailers Association) confirm that the video market is now a majority (58%) digital business.
The once dominant physical rental market has shrunk to £49.3m, down 21.2% year on year.
The biggest-selling video of the year was Star Wars: The Force Awakens with sales of 2.3m units.
The ERA said that booming digital services helped the music, video and games markets achieve 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.
Digital services account for 57% of music revenues and 74% of the games market.
ERA CEO Kim Bayley said, “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. 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.”
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