Clint, Clint, Clint!
Clint, gotta say that I love reading your articles (even if I don't always agree with them, I think they're well written) and look forward to seeing new ones all the time.
I can agree with you partially on this HD format not taking with the general public. I think the issue isn't so much the format as it is the fact that it is physical media. I was surprised that you didn't mention this in your review at all. The problem isn't that people don't like or don't care or even don't notice the higher definitions (I find it very hard to believe -- even my parents who don't care too much about technology immediately notice the difference between standard definition and high definition shows and movies), the problem is that it is STILL on a disc.
You can claim the death of the formats for various reasons, but none of those reasons are the real issue. Unlike the Beta/VHS wars, the difference here is that a) we already have high-def content available through cable/satellite installations, and b) multiple viewing points (home theater, family room, bedrooms, computers, portables, etc.) means that one piece of media won't suffice.
The content isn't the problem -- people love HD content -- they just don't care to have to buy more physical media to do it. Look at Apple for instance, they're locking in music to a portable device so much so that it is a rare thing to see a portable CD player on anybody anymore. Even if people don't buy ipods, they've gotten used to the idea that a little memory stick can solve their music needs rather than carrying a briefcase full of cds.
With movies, the market is different obviously. People are much more open to the idea of renting than owning because unlike music, they have to be fully immersed in a movie to appreciate it (i.e. you don't turn on a movie and than mow your lawn, do your chores, or go for a jog) and you typically don't find a person watching the same movie 50 times (whereas listening to music playlists and the like can result in thousands of songs being listened to dozens of times each). So the economics of the HD-DVD/Blu-Ray scenario don't appeal to the broader public as much. They need genuine differentiation from standard HD broadcasts. This could come in as having interactive decisions made by the viewer to alter scenes in the movies or provide different outcomes -- something of that nature. People also need more rights to the media in terms of being able to watch it on TVs, PCs, portable players, etc.
So, while I agree with you in part that HD-DVD/Blu-Ray isn't successful (I think that it will grow slowly but be more than just a niche market as you claim), I think the reasons for it not being so are completely different from what you've specified. People aren't as invested in what media says about the formats as you think. People do notice the difference in the picture, but don't necessarily care about how they get it. And yes, the cost of the player and the confusion over the HDMI revisions and different digital audio surround sound technologies partly add to this hands-off mentality of the public right now.
If something like AppleTV or Microsoft's Media PC starts renting HD Movies to people for $3 to $5 a piece, you can kiss both formats good-bye or, as you said, liken them to laser-disc. They'll be in even hotter water if they start selling hd formatted movies. The idea of physical media is the real reason why they aren't going to be successful...
