Despite the digital revolution, Bayley said that it was too soon to ring the death knell of the DVD, with physical sales of music, TV shows, films and computer games still worth £2.2bn annually.
The rise in popularity of paying for TV content helped power total UK revenue from music, TV shows, films and video games to a record £6.3bn last year.
Digital sales from online and mobile grew by 12% to £2.2bn, while physical sales of games fell 16% to £776m.
Overall physical sales were 7.3% down as a surge in vinyl sales, up by 56% to £65.6m, helped stabilise the decline.