More than £1bn was spent on downloaded films, music and games in 2012, the highest annual total.
Sales increased 11.4% from 2011, meaning that a quarter of the entertainment market is now digital.
But figures released later by entertainment retailers will also show a big drop in physical sales – more bad news for high street shops.
Sales of CDs, DVDs, Blu-ray and video games fell by 17.6% in 2011 although they still make up most of the market.
Kim Bayley, director general of the Entertainment Retailers Association (ERA), which will release the figures, said that breaking the £1bn barrier was an “incredible achievement” for retailers.
“This 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 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.
Source: BBC News