When DVD came out, all people needed to buy was a DVD player or a PS2 to enjoy its benefits. And even today, most people aren't utilizing it to its fullest effect, still using CRT tvs or low quality LCDs/Plasma screens which don't show much difference in quality.
Look at Blu-Ray on the other hand. The players are still twice the price of a DVD player. And not only that, they practically shove in your face the fact that you will never enjoy the benefits of Blu Ray without a 42" 1080p HDTV with HDMI components and 7.1 Sorround Sound Speakers. Asking people to buy a whole new medium is always tough. Asking them to virtually buy an entire living room set to enjoy it, is a laughing stock.
The true reason Blu Ray isn't overtaking DVD is because people aren't ready yet. In another 5 years or so, when everyone is done replacing their TVs with an HDTV, it probably would have been fine. But they brought it out some 8-9 years after DVDs even took hold. Many people still are just getting into DVDs.
All that said, Blu-Ray is doing a LOT better than it did a few years ago. It'll probably be an uphill climb, but Blu-Ray will take hold. But like I said, not until they see a significant difference (which requires an HDTV and more).
scottie said:
Advantages of DVD over VHS
Better video and sound quality
Discs/cases take up less space than VHS
Ability to skip chapter, bookmark chapters, and navigate through menus, allowing extras such as deleted scenes, many languages worth of subtitles (or sometimes audio dubbing) on the one disc
More long lasting, and can be burnt as a backup if it is getting damaged.
Work in a variety of devices, from games consoles to computers
Advantages of Blu ray over DVD
Better video and sound quality
It's pretty damn obvious why Blu Ray failed
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The image on Blu-Ray is 10x better than DVD. You just need a good HDTV to tell. The problem was, like everything else Sony has done in the last 10 years, they focused on trying to appeal to the hardcore graphical lovers and not the vast majority of the market.