U.S. spending on movies and TV shows for home viewing fell 1.8 percent to $17.8 billion last year, as soaring outlays on digital products failed to counter the continued decline of DVDs. The drop accelerated in the fourth quarter, when sales of DVDs fell 16 percent to $2.34 billion and rentals shrank 8.5 percent to $833 million, according to the Digital Entertainment Group, a Los Angeles-based consortium founded by the studios. Digital spending, including rentals, purchases and streaming services, grew 16 percent to $2.12 billion. Home entertainment is a major source of revenue for Hollywood, with sales 70 percent larger than the box office in the U.S. The business has been buffeted by change as online viewing and purchases have grown and spending on DVDs withered. Total home entertainment spending shrank 4.1 percent in the fourth quarter to $5.3 billion, a reflection of those trends. "Consumers embraced the convenience and accessibility of purchasing and collecting digital content, while studios reaped higher margins from these digital sales," according to the statment

DVD sales are sliding because more consumers are watching content digitally. (This involves two markets.)

Market

What Changed per article?

Demand - increase or decrease?

Supply - increase or decrease

Curve Shift?

Which curve, what direction?

Equilibrium Price and Quantity - direction of change in price and/or quantity