According to industry data, more than one in 10 television programmes are now watched through an on-demand service rather than on a TV set.
A record number of people now choose to save their programmes for viewing later rather than watching it live, with more than half now owning digital recorders.
According to the Daily Mail, the increase in viewers using the web to watch TV has led to a boom in online advertising.
Just over 10 percent of television is watched on demand, either being recorded through a service such as Sky Plus or online, the report said.
According to the report, last year the proportion of households with digital video recorders passed 50 percent for the first time, allowing more viewers than ever to choose when and how to catch up with their favourite programmes.
On-demand viewing is especially popular among the young, meaning that youth-oriented programmes are disproportionately likely to be watched online.
According to Thinkbox, the average adult in the UK watched just 90 minutes of online television per month last year.
But with six percent of young people not having a TV at home, the popularity of Internet video, including on mobile devices such as smartphones, is only set to rise, the report said.
Although the online advertising boom is fuelled by this phenomenon, it also poses challenges for advertisers who must seek an audience through a wider variety of methods than ever before.
While the amount of TV watched on demand is expected to increase, Thinkbox claims that it will eventually stabilise at around 15 per cent of all viewing, the report added.