Sales of films on DVD more than doubled in 2001
Almost 2.4 million DVD players were also bought in the past year, 550,000 of them in the run-up to Christmas, the British Video Association (BVA) says.
The BVA also reports sales over the last 12 months in Britain of a record total of 122 million videos - more than 30% of which were in the DVD format.
DVD's gains appear to be at the expense of VHS - while sales of DVD films rose from 16.6 million in 2000, the number of VHS movies sold dropped slightly, from 87.3 million to 84.7 million in a year.
The animated film Shrek was the best-selling video overall last year, with 2.75 million copies bought since its release in November - 25% on DVD.
In second place was the movie version of Bridget Jones's Diary, notching up sales of 1.8 million, 532,000 of which were on DVD.
The film Cats and Dogs was the third bestselling video, with 1.7 million copies, 300,000 of them on DVD.
Lavinia Carey, director general of the British Video Association (BVA), said: "Since DVD was introduced in Britain, in 1998, it has become the fastest growing
consumer entertainment product of all time."
Last month, Warner Home Video reported that almost three million DVD units had been sold in the product's first three years.
It took the compact disc (CD) player and video recorder seven years to achieve similar sales.
DVDs offer higher quality pictures and sound than video recorders, plus extra features
'In demand'
Chris Jenkins, editor of Total DVD magazine, told BBC Radio 4's Today programme: "It's a technology that people want.
"There's a long history of failed systems and formats that just goes to show that if people are buying DVD, it must be giving them what they want."
But Professor Harold Thimbleby, director of University College London Interactive Centre, speaking on the same programme, warned: "The problem I can see is that the DVD is much better - that people will probably end up throwing away their old televisions, old two-channel amplifiers and old CD players."
It would be easy to "end up spending an awful lot of money on a system that makes everything you've got at home obsolete," he warned.
Since 2000, the price of a player has halved, to an average of £180.