The music industry body said that 26.6 million digital albums were sold, a 24% rise on the previous year.
However, CD album sales fell by 13% to 86.2 million discs. Overall, 6% fewer albums were sold than in 2010.
The BPI blamed the decline on piracy and accused the government of taking too long to tackle the problem.
'Creative crunch'
Digital downloads have recorded rapid growth over recent
years. In 2007, only 6.2 million albums were bought as files over the
internet according to The Official Charts Company.
The year 2011's tally was more than four times that amount.
Fifteen albums sold more than 100,000 digital copies, with Adele's 21
proving the most popular.
However, shoppers still showed a preference for CDs, buying more than three times the number of albums on disc than downloads.
The BPI said that "physical ownership" still played an
important role, but said "a backdrop of chronic piracy" posed risks to
the music industry.
"While other countries take positive steps to protect their
creative sector, our government is taking too long to act on piracy,
while weakening copyright to the benefit of the US tech giants," said
Geoff Taylor, the BPI's chief executive.
"The UK has already fallen behind Germany as a music market.
Unless decisive action is taken in 2012, investment in music could fall
again - a creative crunch that will destroy jobs."
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