The rise of downloads and streaming means that digital music now accounts for half of record industry income in the UK for the first time, according to new figures.
Digital revenue overall has increased by 11.9% on the back of strong album downloads, and streaming income has shot up by 41% in 2013, a report by music industry body the BPI has found.
It has meant the UK music industry saw a 1.9% increase in its income - the first growth in four years for the recorded music industry - which stood at £730.4 million last year - up from £716.8 million in 2012.
Revenue from sales of CDs and music videos continued to decline - dropping by 6.4% to stand at £365.4m - it was offset by digital formats.
Hit albums such as Bastille's debut Bad Blood - the biggest selling digital artist album of 2013 - helped the income from download albums to grow by 19.5%. The trend for luxury digital packages also contributed to the boost, although sales of download singles slipped by 4.4%.
But the rise of streaming services such as Spotify and Deezer offset any drop and represented the fastest growing area. Revenues grew by 41% and generated £77 million for record firms.
Digital income accounted for a milestone 50% UK record industry sales revenue. The figures take account only of the record industry income from digital and physical music and strip out sums for VAT and the add-ons for retail.
BPI chief executive Geoff Taylor said: "With digital increasingly becoming its key source of revenue, Britain's music industry is fit and ready to seize the global opportunities it offers."
Tony Wadsworth, the BPI chairman, said: "After over a decade of digital transformation we are now seeing the transition of the recorded music business reach a significant milestone and a return to revenue growth.
"This was only ever going to happen if we give the consumer what they want , and the continual support given by artists and labels to new ways of enjoying music means that music fans can enjoy more choice and better value than at any time in history."