Could it be a Blue Christmas for Blu-ray?

— -- Chip TaylorThis holiday buying season is going to be the first big market challenge for Blu-ray. This will be Blu-ray's first holiday season as the unquestioned HD format leader, but with the economy in the state that it is, will it be able to actually manage to assert itself as the dominant video format and finally overtake DVDs? I'm having my doubts, and I'm not the only one. A study recently released by ABI Research indicates that 47 percent of holiday buyers expect to decrease their spending from previous years and a comparatively low 40 percent expect to spend the same amount. Specifically on the Blu-ray front, the research found that only 8 percent of holiday buyers were considering the upgrade to a Blu-ray player, despite the fact that prices have reached the sub-200 dollar sweet spot.

One of the biggest problems? The cost. Even though the Blu-ray players have dropped in price, in order to actually get the benefit of Blu-ray you need to own an HDTV, which is still a very expensive investment (though Sharp has unveiled an HDTV with a Blu-ray recorder built in). Then when you consider that each Blu-ray movie costs about double the price of a DVD the numbers don't add up in Blu-ray's favor.

Of course, the cost wouldn't be as much of a problem if the perceived value of Blu-ray was higher. Unfortunately for Blu-ray, most people still don't see the change in quality between DVD and Blu-ray to be significant enough to be worth the cost. Many of those that already have an HDTV are perfectly happy with the quality of the DVDs they already have.

Then there's the Netflix factor. Convenience is of high importance, and it doesn't get much more convenient than streaming Netflix movies through a computer, TiVo, Roku box, or Xbox 360. Even Blockbuster is joining in, introducing its own set-top box to stream movies straight to your TV. Sure, it isn't in HD like a Blu-ray movie, but it's quick, cheap, and easy, all of which are highly valued features. Acknowledged, Netflix has pledged to support Blu-ray, so you'll be able to get it if you want it.

Since Thanksgiving is near and it's the time for family, I'll end with a second opinion from my cousin. He's an avid movie watcher, has an HDTV, and plans to buy a Blu-ray player. "But not yet," he told me. "It's something that I want, but not something that I need. I'm going to wait until it's the industry standard or they stop making DVDs." Unfortunately for Blu-ray proponents, he has lots of company.