The BR format itself is already a niche market. This is a niche inside a niche. I suspect that BR audio discs won't have much of a lifetime.
Some people said the same thing about DVD in 1999, then The Matrix came out 2.5 years into the format's life and was the first disc to sell one million copies.
Blu-ray is "already a niche market"?
You say that like you expect it to stay that way permanently, which it very well will not.
You're also dead wrong I think on a few points. Yes people already have a DVD-Audio/SACD player, but find me one person who isn't a Jazz or Classical fan that isn't 100%, completely and utterly dismayed at the output by the studios. They're not behind one format at all! When was the last time a major label released anything on DVD-Audio or SACD. We're in May 2008 right now. Was it within the last year or longer? The Depeche Mode and Genesis sets won't even come out in North America in high resolution.
For high definition releases they can now include video footage, audio footage, internet connectivity and a slew of interactive options that are not possible with DVD-Audio or SACD. With Warner Music Group, Universal Music Group and SonyBMG already having released videos on Blu-ray there is no doubt that we're finally close to having a format that ALL the major record labels can get behind.
You can be sure that one of the following movies will give Blu-ray a huge chance of beating DVD to the one million mark in terms of lifespan of the format:
Iron Man
The Incredible Hulk
Indiana Jones and the Kingdom of the Crystal Skull
The Dark Knight
Then it will have another 4.5 years to beat DVD to the mark of outrenting the previous format.
Blu-ray will supplant DVD as the home video format of choice. Supplanting SACD and DVD-Audio as the format of choice for high resolution popular music releases should be the easiest of all the battles lying ahead for the format.