Blu-ray, Not the Right Idea In the First Place

Kevin Maney writes: All of the sudden, Blu-ray high-def technology seems to be in a hospice, waiting to die. But really, it's been a bad idea for a long time. Blu-ray was a solution in search of a problem -- an unneeded technology brought out at the wrong time.

In mid-2006, as a growing number of households were buying high-definition televisions, two competing versions of high-def video disks - essentially next-generation DVDs - landed on the market about the same time. One was Blu-ray, from a group of companies led by Sony. The other was HD-DVD, from a group led by Toshiba. The pitch to consumers was that movies on those disks would look sharper and richer than DVDs when played on HDTVs. Yet over the following 18 months, sales of Blu-ray and HD-DVD players and disks in both formats pretty much stunk.

The video players cost three or four times more than DVD players, and a movie on a Blu-ray or HD-DVD disk cost twice as much as on DVD. But the real problem, analysts said at the time, was that the market was poisoned by the format war. Consumers didn't want to buy one kind of player and then get stuck with obsolete technology if that player got booted out of the market, a la Sony's Betamax in the 1980s.

So an end to the format war should've popped the cork on consumer demand. In February 2008, HD-DVD bowed out, leaving the market to Blu-ray. The electronics industry thought consumers were going to come out of the woodwork to buy Blu-ray. But consumers didn't much care. In that first month, sales of Blu-ray players rose only 2%, and it didn't seem to be getting any better in the months after. Most consumers wondered why they'd want to lay out a wad of money to switch to Blu-ray when they already had a perfectly acceptable DVD player and lots of DVD movies.

Blu-ray in 2008 got stuck inside the Fidelity Belly. Blu-ray was certainly not more convenient than DVD. It cost more, not as many movies were available in Blu-ray format compared to DVD, and rental outfits like Netflix and Blockbuster carried few if any Blu-ray titles - not to mention that, according to the Consumer Electronics Association, 84% of all adults already owned a DVD player. (Already owning something makes it awfully convenient!)

On the fidelity side, Blu-ray certainly is better than DVD - but not enough better to make people run out and buy Blu-ray. In the 1990s, DVDs had offered a huge improvement in quality of picture and quality of experience compared to VHS tapes. (No rewinding! Bonus features!) Blu-ray enjoys no such fidelity advantage - certainly not enough to get consumers to trade the convenience of DVDs for the slightly better fidelity and much worse convenience of Blu-ray.

For the time being, in the category of "watching movies at home," DVDs enjoy a position of high convenience and good enough fidelity to keep most viewers happy. A new format could win consumers by offering a vast fidelity improvement (perhaps 3D disks?) or creating a big improvement in convenience (probably movies on demand- if those offerings get easier to use and much cheaper than DVDs). Blu-ray, though, will have a hard time getting out of the Fidelity Belly. It has little hope of getting significantly better in fidelity compared to DVDs, so it can't climb out of the Belly that way.

Its only hope is for the players and disks to become nearly as cheap and available as DVDs, so that Blu-ray and DVD technologies are about even in convenience. Then Blu-ray's better fidelity might be enough to convince masses of consumers to switch.