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Not the Best Year For DVDs, CDs, Movies and Games

Much of the entertainment industry saw a downturn last year. Profit centers for Hollywood's main business fell as DVD sales were off 13%; CD sales dropped 19%; and video, concert and theater attendance also slid. Technology is letting people get entertainment cheaper and faster, and the dissolution of the American middle class is not good news for cable and DVD companies, according to market observers.

While affluent consumers are stuffing themselves with the latest mobile phones, tablets, or Internet-connected TV sets, "It's the other half [40% of American earners] that is being largely ignored in this discussion," said Craig Moffett, an analyst with Sanford C. Bernstein & Co. He said that after paying for food, housing and transportation they only have about $100 per month to cover healthcare, clothing, phone service and entertainment.

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