9 reasons why Blu-ray will succeed

I've been seeing a lot of articles lately about Blu-ray's fuzzy future, how it's doomed, and how its success will be short-lived even if it does take off. Well, that may well end up being the case, but I gotta say, from where I'm sitting, there's a far greater probability that Blu-ray will do just fine--for a long time. And I'm not saying that because I'm a fanboy or a shill for Sony. I'm saying it because a lot of simple market factors point toward it doing just fine. Here are nine reasons why I'm right.

1. Digital downloads will not eliminate the need for discs anytime soon.

Let's address this first since this is the biggest factor that people cite when trumpeting Blu-ray's defeat. If you haven't noticed, here at CNET we spend a good amount of time covering new streaming video platforms and services and really enjoy testing these new products. Everything from Hulu to Netflix streaming video to Slingbox to Apple TV to Vudu all show promise. That said, all these products have some limiting factors, including lack of content selection, pricing hurdles, and most particularly, bandwidth issues, which affect video and audio quality.

Case in point: The other night I was running Netflix's video streaming service on my Xbox 360. I fired up the movie, The Adventures of Baron Von Munchausen on a large rear-projection TV. It looked like crap. How crappy? Well, bad enough for my wife to say, "Get that off the screen right now." (The hazard of watching virtually everything in HD is that everyone in your household over the age of 7 becomes a video snob).

Next, I tried The Wiggles to better results. The program had brighter scenes and less movement, so the picture wasn't quite as soft and pixelated. My 5-year-old could handle it just fine. However, I had to leave the room after 5 minutes in extreme pain. (It was due to the content, not video quality. Man, that's some bad music).

Now, I'm sure folks who've got Verizon's Fios installed in their homes are getting a much better picture when they stream their Netflix video. But I'm dealing with cable internet from Time Warner in Manhattan and while it's acceptable for streaming video onto a 22-inch computer monitor, the pipe really isn't fat enough for blowing things up too far beyond a 32-inch set without things getting pretty fuzzy. (Our video guru, David Katzmaier says he's happy with the bandwidth he's getting from Time Warner in Brooklyn, but he says he, too, runs into some pretty rough pictures, especially those that involve a lot of action sequences).

I can't see Time Warner and other cable Internet providers suddenly delivering more bandwidth anytime soon (if anything, my connection seems to have gotten worse in recent months). DSL is even worse in a lot of cases--unless you're willing to pay ridiculous rates for top-of-the-line bandwidth offerings, which are usually geared toward businesses not consumers. And there's also plenty of talk about ISPs throttling back on bandwidth to police illegal downloads of music and yes, movie and TV shows.

The incoming Obama administration is reportedly going to be offering incentives to providers for building out broadband offerings and increasing bandwidth (eventually, anyway). Whether that has any impact or not, I still think we're a good 3-5 years away before the pipes really get fat enough for many of these IPTV/ streaming video services to reach their full potential and move from niche to mainstream status. In that time prices for both Blu-ray players and discs will look a lot like what you see today on their DVD brethren (see reasons #4 and #5).

2. Having one clear standard is a big advantage.

One of the problems with digital video streaming and downloads is that there's no standard for the industry to coalesce around. It's all a hodgepodge of stuff with various factions competing against each other with the consumers stuck in the middle of it all. That will slow adoption.

3. Blu-ray isn't going to be replaced by another disc format anytime soon.

When both Blu-ray and HD-DVD were in the midst of their little battle for the right to be crowned winner of the next-generation DVD format wars, there was lots of chatter about skipping this generation of disc technology and moving on to something that offered capacity beyond the 50GB you could store on Blu-ray discs. My favorite was "holographic storage," discs, which could carry like 10 times the amount of data.

The problem is, no one's got the money or marketing power of Sony and its allies to bring out a new disc format, even if it is technically better. Also, Blu-ray is plenty good enough and will be for the next five years, if not longer, especially when they start adding special layers and all that fun stuff companies do to eke more out of a technology.

Yeah, Blu-ray's got plenty of downside competition from DVD, but there's no upside pressure coming anytime soon from some higher-end format. This is it for a while, folks. Blu-ray is the de-facto standard for high-definition discs.

4. Prices for large-screen HDTVs will continue to drop.

Yes, we're dealing with a serious recession here. But people are still buying HDTVs (maybe not as many, but there are certain necessities in life, and a good TV is one of them; it's the American way). And with prices becoming more affordable for sets 50 inches or bigger, you've got a growing base of installed users who are ultimately going to want to get the best picture they can out of their TVs. Eventually, DVD isn't going to cut it for people with large-screen TVs. And at the end of the day, Blu-ray looks significantly better than DVD--or pretty much anything else, including most HDTV broadcasts--on TVs 50 inches or bigger.

5. Prices for Blu-ray players will continue to drop.

By this time next year, there will be several sub-$100 Blu-ray players on the market. Once you get to those price points it becomes much more of a no-brainer for consumers to purchase a Blu-ray player. Yes, you 'll be able to buy a decent DVD player for $60. But if you tell someone you can have a player that plays back "HD" discs and DVDs, he or she will think hard about shelling out the extra cash. And it will also help if...

6. Prices for Blu-ray discs will drop to near DVD price levels.

In a small number of cases, we're already finding examples of Blu-ray versions of movies that cost virtually the same as their DVD counterparts. In the coming months, you'll see the prices for Blu-ray discs gradually drop with the gap between Blu-ray and DVD prices narrowing. They have to. This is how businesses work. You get the cost of production down to the point where you can spur demand and still manage to turn a tidy profit.

While people aren't going to buy as many Blu-ray discs as they did DVDs (plenty will rent from Netflix and other outlets), they're still going to buy some. Given the choice of renting an HD movie on demand for $6 and buying the disc for $15-$20, you're going to get your share of folks buying a tangible, physical product. And let's not forget that the price for watching movies in theaters is getting ridiculous ($12.50 per person here in Manhattan). Buying a pristine copy of the movie for $15-$20 is going to seem like a bargain, especially for a family of four--or more.

7. Sony will sell lots of PlayStation 3 game consoles.

As Sony trims the price on its PS3, it will sell more of them. Many more. And every PS3 has a Blu-ray player in it (and we still think it's the best player out there). This has always been Sony's Trojan horse for the platform. Don't forget it.

8. Sony can't afford to have Blu-ray fail.

Sony won the war with HD DVD, and now it's got to take that win to the bank. Sony and its partners will do everything in their power to make it succeed. That's a lot of marketing juice.

9. Sony and its partners will figure out a way to have Blu-ray resonate with the public.

In several market research studies, Blu-ray has run into a basic problem: a high percentage of consumers don't understand just what Blu-ray is and what it does for them.

I always liked the name HD DVD better than Blu-ray because I thought the name translated better to the average consumer. Some argue that Blu-ray is a better name because it connotes something new and different (and presumably better). Well, when you have people misspelling your brand's name (Blue Ray), you have a problem.

I would encourage Sony to embark on a whimsical, self-deprecating ad campaign that educates consumers about its platform and teaches them how to spell its product correctly. As we used to say here at CNET--whenever we saw our site incorrectly referred to as c-net, C|Net, or CNet--spelling is telling. When everybody knows how to spell Blu-ray correctly, the format will be a success. I'll bet my old HD DVD collection on it.

As always, feel free to agree or disagree with me and list your reasons you think Blu-ray will make it, fade away, or muddle about in a place between success and failure, forever eliciting praise and criticism.

Note: For more reasons why Blu-ray isn't doomed, read Matthew Moskovciak's excellent post recounting what early critics had to say about DVD and how it relates to Blu-ray today.

Additional reading: See CNET's Quick Guide to Blu-ray and current list of top-rated Blu-ray players.