Digital music sale revenue tripled in the first half of 2005 compared with 2004, figures have suggested.
The IFPI said increased broadband use contributed to digital music growth
The International Federation of the Phonographic Industry (IFPI) estimated 6% of record industry sales were digital, worth $790m (£450m).
"The digital music boom is continuing and it is growing at an exciting pace for the music industry," IFPI said.
However, revenue from sales of physical music formats, like CDs, fell 6.3% and the overall market by 1.9%, it said.
That translates to a global drop in the market from $13.4 billion (£7.6bn) to $13.2 billion (£7.5bn), for all music sales - regardless of format.
DROP IN NON-DIGITAL SALES
US - 5.3% drop in value
Japan - 9.2% drop in value
UK - 4% drop in value
Germany - 5.8% drop in value
France - 2.7% drop in value
Meanwhile, IFPI said the surge in digital music sales was being driven by the increased use of broadband, 3G mobile phones and portable music players.
The digital music market had overtaken the value of the global singles market, it said.
The IFPI said the decrease in digital revenue was due partly to lower retail prices, a decline in DVD music video sales and music piracy.
Release schedules and competition from other entertainment sectors were also factors, it added.
IFPI did not release a regional breakdown for digital music sales.
But it described the growth of digital music sales in the UK as "explosive", saying 10 times as many singles were sold in the first half of 2005 than the same period in 2004.
IFPI chairman and CEO John Kennedy said: "More and more people in a growing number of countries are turning to the new legal ways of downloading music on the internet or via mobile phones."
Mr Kennedy added that legal and educational moves to stop internet piracy were working.
"There is a long way to go - digital and physical piracy remain a big threat to our business in many markets," he said.
"Our industry's priorities are to further grow this emerging digital music business while stepping up our efforts to protect it from copyright theft."