No one was hurt in the attack on the market in the northwestern town of Miranshah in the North Waziristan region, part of an ethnic Pashtun tribal belt in northwest Pakistan that has never come under the control of any government.
"About 25 masked militants came at about 1:30am planted explosives and blew up the entire market," said Mohammad Sakhi, who runs a workshop next to the market.
The stalls offered pirated Indian and Hollywood films as well as music discs of Pashtun folk music. Some kept more racy movies under the counter, a resident said.
There have been numerous attacks on video and music shops in remote northwestern border regions by Islamists who see all music, film and television as unIslamic.
But the attacks have spread to towns in North West Frontier Province in a process referred to as Talibanisation.
Last year, hardline religious students from a radical mosque even tried to press video shops to close in the capital, Islamabad.
Authorities have largely turned a blind eye to the attacks on markets, and similar attacks on girls' schools, to the dismay of the moderate majority of Pakistanis.
"I've lost everything. This was my only source of earning for my family," said Ahmed Gul, whose shop was destroyed in the blast.
A new government has begun negotiations with the aim of bringing an end to militant violence that has killed hundreds of people since the middle of last year.
But analysts say peace pacts are unlikely to stop the militants' efforts to impose their austere version of Islam.