And, in a way, Hollywood is hedging its bets. Each time a studio spends millions to restore a classic film such as Jaws or Lawrence of Arabia, it adds a new high-definition master that can be licensed for TV broadcast or streaming.
Whatever streaming's effect on Blu-ray, Hollywood is backing the discs for the foreseeable future. But many believe that Blu-ray could be the last physical format.
"We really don't know what the future is going to be," Baker says. "It's illogical to think that in the next four to five years there is going to be a new format — like DVD was new when VHS was around, or Blu-ray is new when DVD is around."
Blu-ray could evolve to handle even higher-def, 4K video that delivers four times the resolution found on current discs. Sony already markets a $25,000 4K projector and a $250 Blu-ray player that converts current discs to 4K resolution.
More 4K HDTVs are due later this year. A new 4K ecosystem with higher-resolution discs and TVs could "give optical media another four to five years," says Tom Campbell of Video Audio Center, a Los Angeles-area electronics retailer.
New high-end products are needed because even though lower Blu-ray prices attract consumers, they result in lower margins for retailers — and studios. "Hollywood is looking at this, and we as retailers are concerned about it," Campbell says.
Contributing: Bryan Alexander