Digital music revenue has overtaken sales of physical formats such as CDs for the first time in the UK.
Digital accounted for 55.5% of the £155.8m spent on music in the UK in the first three months of this year, according to new figures from the British Phonographic Industry (BPI).
Income from digital sales has risen by nearly a quarter year-on-year to £86.5m while revenue CDs and vinyl dropped by 15% and now represents just £69.3m.
The growth of downloads, subscriptions and ad-supported has offset the decline in CDs to boost the overall market 2.7% to £155.8m.
BPI chief executive Geoff Taylor told the BBC: “UK record labels have embraced digital to their core, supporting innovation and licensing more new online and mobile services than any other country.
“As a result, the industry’s prospects for growth look brighter than for several years.”
He added: “We will need to see the trend repeated for several quarters to say we have turned the corner - demand for physical CDs remains strong in the UK.”
Digital downloading is becoming an increasingly competitive market with major retailers jostling for market share. Earlier this month Sainsbury’s launched a music download service while Tesco last year acquired movie streaming website Blinkbox to compete with rental service Lovefilm.
The move towards digital downloads has hit entertainment retailer HMV which has slimmed down its retail estate as a result of its customers moving online.
The UK music industry as a whole was worth £795m last year, down 3.4% on the previous year.