As the world has become digital, dvd and cd sales have declined. That HD DVD were fighting for dominance, and how quickly Blu Ray eliminated the competition, only demonstrates that the dvd, in any form, is a dying animal. Like the VHS player before it, technology is quickly changing how we watch content.
I do not see Blu Ray, as a stand alone box, getting dominant. I think the only way this format gets into the home is to be combined with the game console approach through Playstation. And despite getting into the home, most users will be less likely to purchase discs and more likely to either rent through Netflix or get an HD show through broadband.
Its not the cost that makes the likely of Sony Blu Ray being dominant, its that the technology has changed so rapidly that the dvd, whether in hi def or not, is no longer the current standard for watching content.
I see more potential with Tivo downloading streams of HD content from Amazon. And I wouldn't be surprised when Playstation 3 enables downloading of HD to its box as well. There might exist opportunity to get an incremental purchase by allowing the content to be copied to disc, flashcard, ipod, etc.
