(I haven't read the full thread so I appologize if I'm restating something someone has mentioned)
Through most of the 1990s Hollywoold was fairly conservative about the scale of the projects they were producing; at the time many movies were not making much of a profit so only movies with good writing, good directors, and good actors were able to get much in the way of financing to produce their movies. This resulted in most big budget movies actually being good movies and people rushed out to see them in the theater to catch the spectacle.
Now, along comes DVD which is cheaper to manufacture than VHS, is more expensive than VHS (to the consumer) and (for some reason) people buy way more DVD movies than they bought VHS movies so suddenly movies studios were making money on (practically) any movie they produce. Movie studios started to bank-roll many more big budget movies and many writers and directors were able to produce movies they wanted to produce for years. Big budget movies (on the whole) were still doing fairly well because most of them were still high quality but many were begining to flop at the box-office (although, still doing fairly well with DVD sales included).
Today practically every movie that is released is a big budget movie with almost no quality controll; Michael Bay walks into a room, says he wants to make a Transformers movie with "Wicked" special effects and he gets a check written for $200,000,000.00 without anyone asking "Will this have a plot or character development?" Certainly, this hasn't hurt every studio but the industry as a whole is complaining about losing money and they blame it on movie downloads.
Many people (like myself) have been stating that the industry needs to return to its roots and focus on better writing, acting and direction and for them to return to producing original stories; stop making so many comic book movies and videogame movies because (for the most part) they're awful. Certain people will hear this as me stating that "Special Effects don't matter" and will disagree without hearing the content of what I am saying.
I see the same basic patter playing out with the videogame industry and the 'rise' of the Playstation brand being very much like the adoption of DVD. On the whole I think that developers need to stop focusing on graphics so much and focus more on gameplay; the industry needs less sequels and less licenced properties. Had Lair (as an example) been produced with graphics only somewhat better than the Wii's graphics and Factor 5 focused more on producing a quality gameplay experience it would have sold better and been far more profitable.