Globally, sales and rentals of DVD and Blu-ray discs fell by seven per cent to $10.9bn in the first nine months of this year compared with last year, according to The Digital Entertainment Group.
And in the UK the British Video Association says disc sales fell 5.6 per cent during 2009, with analysts predicting a further fall of two per cent in 2010.
Home entertainment is undergoing a revolution similar to that seen in the music industry, with the buying public increasingly choosing to rent or download films online from the likes of iTunes and LoveFilm.
Now that an increasing number of TV, set-top box and games console manufacturers offer some form of access to web-based on-demand content, buying the latest box set is no longer quite such a pull. The recession has driven consumers towards cheaper rentals, depriving the Hollywood studios of their traditional profits from discs and lucrative box sets.
Viacom, the owner of Paramount Pictures, has reported a 43 per cent drop in home entertainment revenue this year, Time Warner (owner of Warner Bros) faced an 8 per cent decline and Lionsgate reported a 22 per cent drop, according to MediaGuardian.
More after the break
It's all a far cry from the days when DVD, launched in 1998 and then the fastest-adopted consumer electronics product, became the film studios' biggest cash generator. The industry generated $14bn (£9bn) in sales by 2004, with more than 250 million discs sold each year in the UK alone.
However, there have been some bright spots: Avatar sold six million copies on Blu-ray in three weeks, prompting an 86 per cent surge in Blu-ray sales at the time.
The Top 10 selling Blu-ray discs to date are:
1 Avatar (20th Century Fox)
2 The Dark Knight (Warner Bros)
3 Star Trek 11 (Paramount)
4 Transformers 2 (Paramount)
5 Quantum of Solace (20th Century Fox)
6 2012 (Sony Pictures)
7 The Hurt Locker (Lionsgate)
8 Casino Royale (Sony Pictures)
9 Iron Man (Paramount)
10 Terminator: Salvation (Sony Pictures)