As Blu-ray player sales overtake DVD player sales, it will definitely help increase Blu-ray movie sales, but this does not mean Blu-ray movie sales are going to eventually conquer DVD. I hope this happens, but here is what's needed:
1. The price of Blu-ray players needs to fall to a price comparable to DVD-players
2. The price of Blu-ray movies needs to fall to more reasonable prices
3. Blu-ray players need to reach a sufficient penetration so that Blu-ray movies can be viewed anywhere DVDs can be viewed... this means not just in the home theater, but in the bedroom, auto, hotel, dorm room, etc.
4. Enough time needs to pass so that existing DVD movie collections become less desirable for viewing than Blu-ray collections
Item 1 is already starting to happen. It will still be a little while before price parity is reached due to economies of scale, i.e. - because companies have more experience producing DVD players and they make more of them, DVD players will remain cheaper to produce for a while.
Item 2 is *slowly* starting to happen. When we first purchased our Blu-ray player, we spend hundreds of dollars buying some of our favorite movies. But now we shop very carefully, waiting for sales, etc. so we don't spend twice as much for a Blu-ray as for a DVD movie. We were willing to fork over extra cash for our favorite blockbusters, but we're not going to spend >$20 for something like Bolt on Blu-ray... we continue to purchase those on DVD or wait for a special sale. Also, we noticed that our local Super Walmarts have recently cut their Blu-ray selection in half. When I asked why (as their prices tended to be lower than Best Buy's), they said they just couldn't move enough of them to justify the shelf space. On the other hand, Best Buy has dramatically increased their Blu-ray selection and is starting to get price competitive with Walmart. Having Walmart cut back hurts the momentum, particularly considering that many communities in the midwest have a Walmart 10 minutes away while the closest Best Buy or FYE is often 30-60 minutes away. Also, our two FYEs have slightly increased their Blu-ray collection over the past 2 years, but not by a lot. In other words, it's a race against time. Best Buy cannot carry the Blu-ray format on their own... if the FYEs, Walmarts, etc. end up removing them from their stores, it will take a LONG time for the stores to bring them back, and for all American consumers to have convenient access to them.
Items 3 and 4 are what's needed for Blu-ray to not only succeed, but to actually displace DVD. People are going to continue to buy DVDs until they can play Blu-ray movies on long car trips, on their bedroom DVD players, on their dorm DVD players, etc. Consumers are not likely to go out in the next 36 months and replace every DVD player they have, particularly if the TV connected is standard definition and the player works. And the existing "mass" DVD movie libraries means consumers aren't starting their collections from scratch. The longevity of DVD media--if it's handled in a reasonable way--means that, unlike VHS tapes, DVD do not need to be replaced due to media wear. That year-old copy of Cinderella on VHS started to malfunction after the first kid watched it 50 times, but a well-cared-for DVD can last almost forever (our 75+ DVD collection is in very good condition as my wife and I handle the movies ourselves).
So, while I'm a considerable HD enthusiast (I have over 60 Blu-ray and HDDVD movies), I'm not go to just assume Blu-ray is going to "win" over DVD. It has a long road ahead of it. On the other hand, Blu-ray is doing better than I had hoped, so I'm optimistic about its chances.
I am Mario.
