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 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.

But the Blu-ray format still represents only a tiny fraction of DVD revenues. Hollywood studio executives are hoping that aggressive price cuts of Blu-ray players and the imminent release of summer blockbusters such as The Dark Knight and Wall-E will boost the format.