Investors who are shocked today by Best Buy’s miserable performance in the quarter that ended in August should take a fresh look at Bernstein Research analyst Craig Moffett’s important studies of what he refers to as the media industry’s “looming affordability crisis.” A report out today, synthesizing some of his recent research, notes that once the poorest 40% of the population pays for food, shelter, transportation, and health care “there is nothing left for clothing…for debt service…for cable…or for phone.” If the government cuts entitlement programs then it would “have a profound impact on spending patterns,” Moffett says, that would lead the media industry into “uncharted waters.”

Best Buy’s new quarterly report suggests that Moffett could have made the same affordability argument about media-related gadgets. The stock is down 7.6% in mid-day trading after the No. 1 consumer electronics retailer reported net earnings of $177M, down 30% vs the same period last year, on flat revenues of $11.3B. Earnings at 47 cents a share fell short of the 53 cents that analysts expected. Best Buy says that it’s selling lots of tablet computers and e-readers — which largely appeal to well-off early adopters. But it’s struggling to sell mass audience products including TV sets, digital cameras, gaming systems, and physical media such as DVDs. That’s why the chain forecasts that sales at stores open a year or more could decline as much as 3% for the fiscal year that ends in February. And the retailer will only be able to reach its earnings target of as much as $3.65 a share by spending $1.5B to repurchase its stock — effectively adding about 25 cents to the total.