Hollywood studios that are owned by the world’s biggest media companies are preparing to curb the lucrative pay deals offered to film stars following a precipitous decline in DVD sales, the industry’s most important revenue stream.

Hollywood has come to depend on DVDs, with many films only breaking even once they are released in the format. But a decline that started slowly at the beginning of last year accelerated from November, with sales of new titles falling 21 per cent, according to Nielsen figures seen by the Financial Times.