This should be Blu-ray's big moment in the sun. Sony's ( SNE)next-generation, high-density, optical/video disc technology finally won the battle over the Toshiba and Microsoft ( MSFT)-touted HD-DVD format. But what exactly did they win? Yes, Blu-ray is the high-definition disc of choice for the movie industry. New movie releases tout that they're now available on both DVD and Blu-ray, but so what? For most consumers DVD, is a lot less expensive -- player and discs are dirt cheap compared to Blu-ray machines (although those prices are falling). And the next step might not be about getting consumers to switch from one disc format to another. It could be that future movie consumers will prefer downloading movies directly to their home. For now, everyone is hedging their bets on the next direction for the home movie-viewing industry. Blu-ray machine manufacturers are reaping lower production costs and have begun slashing the prices of some of their current playback decks from companies like Sharp, Sony, Samsung, and Panasonic ( PC). What used to cost $300 or more at the beginning of 2008 now hovers around $200. If you search really hard on the Internet you might even find Blu-ray "hardware" selling for $170 or less. Prices for Blu-ray "software" -- the actual discs -- are falling, too. Next-generation Blu-ray machines, which should be announced soon, will have new features but will cost more. It will take a long time to convince millions of old-fashioned DVD users that their machines are technologically outdated. Double that skepticism while the country is battling this economic downturn. DVD discs are inexpensive, and DVD playback decks are very, very cheap. Rentals are not only cheap but they're abundant.
Blu-ray's advantageous video quality may not look that much better on most current TV sets. So why waste the money? Many companies are betting the house on what will probably be the next big thing in video: instant movie downloads. Apple's ( AAPL)Apple TV, Netflix's ( NFLX)PC Download Library, Amazon's ( AMZN)Movies on Demand, TiVo ( TIVO)DVR, your cable/satellite service and dozens of online sites all offer quick ways to get a movie into your living room without having to go to the store or waiting for the mail. Prices for these online services are very competitive, and the quality is pretty amazing. I have tested the latest version of the Apple TV box (the first one stunk) and have to tell you that viewing an HD movie on my wide-screen TV at home looked absolutely fantastic. From choosing the movie to watch to renting and then starting to watch took less than 60 seconds -- and all of this done from the comfort of my couch. That can't be beat. I don't care how technically good a Blu-ray disc can be, it can't compare to the quality and ease of movie download services via the Web. So, while it's good that Blu-ray prices are finally coming down, HD downloads will be the next big thing for home video. Sorry, Sony.