More than £160m will be spent on music and video downloads in the UK this year, according to a forecast.
Digital downloads are worth just 4% of the total music and video market
Market analysts Verdict said digital downloads will be worth £163m in 2007 - up 45.5% on last year.
And digital spending will continue to soar, reaching £600m a year by 2012, according to Verdict's UK Music and Video Retailers 2007 report.
But CD and DVD spending has slowed, it said, with the overall UK music and video market down 2.9% to £4bn in 2007.
Verdict analyst Nick Gladding said: "While piracy will continue and CD volumes will decline further, retailers generally are now better placed to cope with new market challenges."