Hollywood is bracing itself for a steep decline in DVD revenues this year as consumers turn away from the ageing home entertainment format that has been the film industry’s biggest cash generator for the past decade.

Revenues from DVD sales and rentals account for the bulk of the $50bn global home entertainment industry but are expected to fall 7.5 per cent in the US this year to about $21.6bn, according to Digital Entertainment Group, which represents Hollywood studios and technology hardware manufacturers.