Recession Hits Blu-Ray Where it Counts

— -- Tech analysts predict a cold winter for Blu-ray. Roger Kay, President of Endpoint Technologies Associates, says Blu-ray sales will experience a dramatic drop during the holiday season and beyond, delaying the adoption process and putting the serious hurt on sales.

Instead of dropping big bucks on Blu-ray players, consumers will instead turn to the technologies they have available, such as Netflix -- which now charges extra for Blu-ray rentals -- and streaming video. "If you can get movies over the wire on demand and have an entire library at your disposal on the screen a la Netflix, that's the way you're going to go," Kay told The San Francisco Chronicle.

This bad omen comes after Steve Jobs called Blu-ray a "bag of hurt" and said Apple would delay integrating the technology into its products until "Blu-ray takes off in the marketplace." And Blu-ray definitely isn't taking off yet -- its market share has dropped, and Sony, Blu-ray's leading backer, hedged its bets on end-of-year sales, a gamble that may fall flat given the current economic climate.

Andy Parsons, the chairman of the Blu-ray Disc Association and the format's number one yea-sayer, compared Blu-ray's gradual ascent to that of the standard DVD. "Everyone thinks of DVD as an overnight success, but it actually took several years for that overnight success to happen." What Parsons does not acknowledge is DVD had only VHS to squash, whereas Blu-ray faces a horde of competition that might keep consumers clinging to their Roku boxes and out of their local Best Buy.

Lately it seems no good news comes from the Blu-ray camp. If and when the economy gets back on track, will Blu-ray finally pique interest? Or is the format facing the possibility of becoming permanently niche?