The TV trade body said it was "surprised" by Facebook’s decline but maintained its figures were "the best we can go on" and based on independent data.
Thinbox said Facebook accounted for 1.7% of time spent by all individuals viewing video, including TV, compared with 2.2% in 2015. By contrast, YouTube viewing rose to 6.4% from 4.4% of time spent.
The figures for 16- to 24-year-olds were more dramatic. Facebook more than halved to 2.5% of video viewing in 2016 from 5.7% a year earlier, while YouTube shot up to 15.6% from 10.3%.
Facebook strongly rejected Thinkbox's findings and said the research was "flawed".
Broadcast TV, including live, catch-up and video-on-demand, still dominates viewing but it fell to 74.8% of time spent compared with 76% a year earlier, according to Thinkbox.
Total video consumption rose by two minutes to four hours and 37 minutes a day.
Viewing on subscription VoD sites such as Netflix grew slightly to 4.1% from 4%.
TV remains the key medium for advertising, accounting for 94% of all film ads watched. YouTube was responsible for only 0.7% and other online sites, including Facebook, 5.2%.
Matt Hill, research and planning director at Thinkbox, said it showed TV’s "unrivalled ability" as "advertisers are getting their ads seen on a full screen with sound".
Thinkbox used data from Barb, comScore, the IPA, Ofcom and Rentrak.
Tony Evans, EMEA marketing science director, Facebook, said: "Time spent with video on Facebook has increased substantially in the UK. The methodology presented in this study is flawed and incomplete."
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