updated 7/6/2005 6:20:13 PM ET 2005-07-06T22:20:13

Chief executives of entertainment firms converging on this Idaho mountain resort face some troubling issues, including a slump at the box office and signs that the surge in DVD sales of movies may be slowing.

News Corp.'s Rupert Murdoch, Walt Disney Co.'s Michael Eisner, Ron Meyer of NBC Universal Inc. and Michael Dell were among the first to arrive at the five-day conference Wednesday.

The annual retreat for media CEOs and their families has been held every year since 1983, hosted by Allen & Co., a family-run investment firm with close ties to industry heavyweights.

Sydney Pollack, a Hollywood veteran and regular guest at the Sun Valley retreats, told reporters Wednesday that box office earnings were hurting for several reasons _ more people watching DVDs at home, and an increasingly "loud and rude" environment for enjoying movies in theaters as people use cell phones during the movie.

"Some of it is the movie business' fault," Pollack added. "They're not making movies people are happy with."

The box-office slump has been of growing concern to investors in entertainment companies. Nielsen EDI Inc., a data tracking firm, says ticket sales are down 8 percent year to date.

Another source of worry are signs that the recent boom in DVD sales, which has been a windfall for major Hollywood studios, could be slowing down.

Just last week Pixar Animation Studios lowered its expectations for second-quarter earnings, saying sales of DVDs for its blockbuster animated film, "The Incredibles," were coming in below expectations.

That followed an announcement in May from Pixar's rival, DreamWorks Animation SKG Inc., which missed estimates for first-quarter earnings when revenue from home video sales of "Shrek 2" fell short.

Rich Greenfield, a media analyst with Fulcrum Global Partners, called the announcement by Pixar "clearly disappointing" in a note to investors, especially since it came on the heels of the DreamWorks announcement.

Even with the shortfall, "The Incredibles" will still likely be a hit on home video. Greenfield wrote that he now expects the movie to sell 30 million units worldwide this year, down from his previous estimate of 34 million.

Howard Stringer, the head of movie studio owner Sony Corp., struck a more upbeat note on DVDs. He told CNBC from Sun Valley on Tuesday that he had heard from Wal-Mart Stores Inc. that home video sales were still going briskly.

As they do every year, guests at the Sun Valley conference took in presentations from top technology executives and politicians.

On Wednesday, executives from Intel Corp. spoke, as did the Prime Minister of Turkey, Recep Tayyip Erdogan. Executives from Nike Inc. and Google Inc. are also expected to make presentations, which are officially closed to the press.

Intel said it had made an investment in a company backed by the actor Morgan Freeman to deliver movies to homes via the Internet. Executives did not disclose the size of the investment in the new company, which will be called ClickStar Inc. and will be led by former Sony Pictures executive Nizar Allibhoy.

© 2013 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.


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