I've always disliked this line of reasoning.  While yes, there is less of an incentive to upgrade to Blu-Ray from DVD like there was to upgrade to DVD from VHS, it's also much EASIER to ugprade to Blu-Ray from DVD than it was going to DVD from VHS.

When you buy a Blu-Ray player, all your DVDs will play in the machine, and they'll all look better because of it, due to upscaling.  When you bought a DVD player back in 1998, it made all your VHS tapes obsolete, unless you kept both players around (which many people did).  It also did nothing to increase the quality of the movies you already owned.

In a few years, standalone Blu-Ray players will have dropped to or past the $100 mark.  At this point in time, what will keep people from buying a Blu-Ray player over a regular old DVD player?  Hell, manufacturers could just advertise it as a DVD player, and the few uninformed consumers left would never be the wiser.

Blu-Ray drives will probably end up like DVD drives for PCs today.  They can play practically everything, including obscure formats like DVD-Ram, but that's just about all they make, because it's cheaper for manufacturers to focus on 1-2 SKUs.  That's just what you buy.  You don't track down a CD drive for your PC if you have no interest in playing DVDs.  You just buy the DVD drive.

I've got to disagree with that.  A VHS player and a DVD player both worked perfectly in the same entertainment center.  A BluRay player is only worth buying if you already have an HDTV.  That's around a $1000 investment.  That's still a big stumbling block for a lot of people.  Add on top of that the expense of BluRay players and discs, and the limited advantages are just not worth it for the average consumer.

I think the incentive to replace your VHS collection with DVDs probably helped DVD more than it hurt.  The obvious improvment in convienence and quality was a motivation to buy and re-buy more DVDs.  That hastened the adoption of DVD.  I'm sure that the degradation that VHS suffers also forced a lot of people into rebuying their movies on DVD.

Typical Australian newspaper not knowing what they are talking about. Blu-Ray sales are on par with early DVD sales were in comparison to VHS sales. Introduction period slow sales gradually picks up in momentum as time goes by. Blu-Ray has been available for only two years or something now.
Blu-Rays will go down in price as production costs decrease and supply increases. Prices of Blu-Rays and Blu-Ray players will fall as technology improves. Price drop would increase sales.

I pretty much agree with this. On the other hand, that will likely be at least a couple years until that price point is reached, and I'm not sure how studios respond if it actually does take that long. Blech.

I'm not saying I disagree, Makin, I'm just saying I can see things that point in either direction. I am firmly in the "it's very unclear, there are future indicators that point in both directions, and we don't have many statistics that aren't heavily spun, so let's just wait and see" camp.

The bolded together made me chuckle.

But yeah, I basically agree with you, though I personally feel that the scenario I outlined above is this most likely to happen, out of all those possible.

To get the most out of Blu-ray you need a HD TV. An item that a majority of the world either cannot afford or doesn't care for. It is almost impossible for Blu-ray to become as popular as DVD, particularly given there is relatively little incentive to repurchase movies/tv-shows you already have on DVD. Blu-ray is, quite simply, destined to be mediocre.