Hollywood is braced 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. This is according to the Digital Entertainment Group, which represents Hollywood studios and technology hardware manufacturers.

The decline has been partly offset by growth in Blu-ray, the next-generation format identified by Hollywood as the successor to the DVD. When Blu-ray sales are included, the decline in US home-entertainment revenues this year will be more like 4 per cent, according to the DEG.