Blu-ray's long term future has never been in question. Just like vinyl records and wax cylinders, every "format" eventually becomes obsolete. Before a format is shuffled off to a tech museum somewhere, there has to be a way of deciding whether it was (or is) "successful." As I've noted before, one criteria is the magically arbitrary "50% adoption" rule, which defines success by whether a format is adopted by 50% of US households or not. And we can make predictions about whether a technology will eventually reach that goal by looking at the speed with which it achieves this market penetration.

For example, it took DVD-video about five years to go from introduction (0% adoption) to success (50% adoption), which is the fastest in history. In contrast, the wildly successful and popular technology known as "color television" took about 17 years to succeed. With those two benchmarks in mind, I think we can make some serious predictions about Blu-ray.

First, the positive spin. Blu-ray players have pushed their way into about 6.5% of US households so far. This optimistic number is validated by Netflix estimate that  5.7% of its subscribers are renting Blu-ray discs. Since Blu-ray was introduced to the market only a couple of years ago, this would put it on a pace that is certainly far slower than DVD-Video, but faster than color television. And it is encouraging to note that the slow penetration of color television can be attributed to the high initial cost of the devices, which is one of Blu-ray's problems. And it could be argued that the sheer technical superiority of Blu-ray over DVD-Video means that it is destined for success, much the way color television eventually supplanted black and white TV.

Except that this analogy breaks down almost immediately: Blu-ray is not so obviously superior. In fact, every study ever done on the topic shows that consumers are not at all dissatisfied with DVD-Video and that the vast, vast majority replace old DVD players with new $99 DVD players (usually with ubiquitous "upsampling"), instead of ponying up a minimum of twice that for a Blu-ray player. Furthermore, color television had no competitors, while Blu-ray is under a massive assault from HD video-on-demand services, which sneak into the house via an ever-growing number of routes, most of which are already in there. Between broadband computer video (which is already at 50% adoption), HD cable and satellite boxes and, yes, even game consoles like Sony's own PS3, it's easy to get at least some HD content without buying any new gear. While Blu-ray is unquestionably superior to DVD-Video discs - even though no one apparently cares - the difference between HD Blu-ray and HD cable is much smaller. As a comparison, Global Media Intelligence (GMI) predicts that by 2011, all forms of electronically delivered video will only account for roughly 5% of revenue, so the race still seems tight, but since Blu-ray is more expensive and less convenient, it is hard to see how it can compete in the long or short run.

Andy Parsons, a VP at Pioneer makes a good point, however, when he recalls "...the old visions of the past that the paperless office would completely obliterate the need for paper. It seemed like a very reasonable, logical prediction decades ago that turned out to be completely wrong.” That analogy fails at another level: the reason why paper did not go the way of the dinosaur is that people continue to find paper useful. You can hold it, it never runs out of storage capacity, it's cheap, easy to use, easy to edit, easy to perform searches on, has great random access, is very rugged and unbreakable and, most importantly, doesn't need any sort of special, expensive playback device, although the boot time in the morning can be slow and require coffee in some cases. Sure, rock beats paper, but Blu-ray has none of the advantages of paper and all of the disadvantages of DVD-Video. Plus $200 more, minimum.

There are other Bad Omens that do not read well for Blu-ray. First, while Blu-ray is making some progress, a good percentage of Blu-ray player sales are still Sony PS3 game consoles, and PS3 is a distant 3rd in the game console war. A very distant 3rd that CNNMoney describes as a "sinking ship." Yikes. 

Second, we're seeing a huge investment in what the industry is calling "consumer education" in the form of advertising and marketing for Blu-ray. While it is unquestionably true that marketing can make or break a product, it should be noted that no one needed any convincing to buy a $100 DVD player, which was clearly superior to VHS in terms of quality and convenience and competitive in price. The same criteria propelled music CDs, microwave ovens and, eventually, color television. Another more relevant comparison is HD television: Why wouldn't your next television be HD? So, sure, assuming no outside competition, Blu-ray will eventually succeed the same way the clearly-superior-but-more-expensive color television eventually succeeded. But that's assuming there isn't a cheaper, easier-to-adopt, almost-as-good alternative.

References:
* Sony's PS3 A Sinking Ship, CNN, Dec. 12, 2008
* The Death of the Disc: How Blu-ray Lost the Format Wars
* Blu-ray Disc Association: Disc Still Rules