The number of people buying feature films via online download in the UK has jumped hugely in the past year, according to data from Screen Digest.
There will be a projected 412,000 transactions in 2008, a big jump from the 10,000 transactions seen in 2007.
At the same time, the rate of growth in sales of physical DVDs has fallen from 9.3% to 1.2%.
Separately, Atlantic Records says it is the first music label where digital earnings have overtaken CD sales.
'Yours for life'
The online movie market is expected to grow, accounting for between 60% and 70% of the feature film market by 2011, according to Gary Morris, chief executive of iLoaded, an online film retailer.
"Downloaded content is yours for life, without having to leave the home in the first place," he said.
The music industry has struggled to make money from digital recordings, with piracy a persistent problem.
Digital sales in the UK currently account for about 10% of revenue.
But Atlantic, which controls artists such as James Blunt and Kid Rock and is part of the Warner Music Group, says 51% of its earnings in the past year were from digital.
"Some fans only want to buy the physical disc, some only want to buy a ringtone and a t shirt, others just want a concert ticket, others want to buy a digital album," Craig Kallman, Atlantic's chairman said.
"We need to offer them whatever they want, whenever they want."
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