Box office takings in the US slid by 6% in 2005, final figures have revealed.
Revenge of the Sith was a big hit in the US
Cinema ticket revenues amounted to $9bn (£5.2bn), while total attendance fell by 9% to 1.4bn people.
Some 240m fewer tickets were sold in 2005 compared with the previous year, according to data from The Motion Picture Association of America (MPAA).
The average cost of making a film in Hollywood dropped by $2.5m (£1.44m), but the budget for marketing new releases rose by 5%.
The costs of promoting smaller budget films such as Brokeback Mountain soared by around a third.
But the price of making a movie did not account for contributions of outside investors, which in some cases made up at least half the total budget.
Cinemas have become increasingly concerned that their market is being threatened by the rise of DVD sales.
The MPAA revealed the results of a survey of 3,000 film-goers which revealed that those with DVD players, big screen televisions and digital cable watched the most films at the cinema.
Almost 70% of those questioned said they preferred the full cinema experience and saw around eight films per year.
But a third also admitted that their home offered "the ultimate movie-watching experience".