Personally, I think it's all about mindset.
Young consumers have basically come to expect entertainment for really cheap, if not outright free. They don't pay the cable bill, so TV, to them, is free. They don't pay the internet bill, so streaming videos, bit torrents and pirated content, to them, is free. They get an allowance or work a part time job and believe it or not, the bulk of that money gets spent on food! Not going to the movies, not clothes, not videogames. Food actually takes up the bulk of their disposable cash these days.
So when it comes to entertainment, we've got a whole generation of kids who basically have never had to pay for it and really don't expect to. It doesn't matter how relatively cheap we make Blu-ray, they're not going to care when they can get the movie for free online.
The people buying DVDs, they're all the mid-twenties to forties crowd. People who grew up expecting to have to pay for things and not believing it is totally unreasonable to have to pay for something. As an aside - I read reviews of iPhone apps and anything that charges even $0.99 gets totally blasted as being a "rip off" for NOT being free!
So here's the thing - Blu-ray, no matter how cheap - only appeals to a certain sub set of a sub set. The kids expect everything to be free. Young adults who aren't total home theater nuts like us are totally 100% happy with DVD quality and would be more interested in something like Vudu because it's new and neat even though the quality doesn't really go up. Senior citizens (other than a few anomalies
) have never really been into any of it because they just never grew up with this idea of owning a collection of movies and having everything available at their fingertips. So the only people really looking at Blu-ray at all are the people who are really into movies and HDTV AND have the income to support spending disposable income on such a particular form of entertainment.
We all belong to that small sub set, but we're basically ok with paying a little bit more for the higher quality. Sure, we'd all love lower prices too. But it doesn't really change our buying habits. So long as we can afford it, we'll buy it, because that's what we're into. And we've also been raised with the mindset that paying for things is normal!
So the real question ends up being - would decreasing the price increase the market?
And my honest opinion is that it really wouldn't. It would expand it somewhat, but not a whole lot.
Let's put it this way: I honestly think you could price Blu-ray players at $80 and sell the discs for $15 and we STILL would not see an explosion in adoption. Why? Because the vast majority of people just don't care. We may go on and on about how great Blu-ray looks and sounds, but in reality? The vast majority of people just don't see or hear the difference over DVD.
First question the average person would ask about a $80 Blu-ray player?
"Does it play DVDs?"
That's the mindset. That's all they care about. Now show them a Vudu and they'll totally think it's the bee's knees!
So we can preach and we can hollar and testify. We can show average people a Blu-ray version vs. a DVD version and we could even price them exactly the same. But the reaction will remain a steadfast, "meh..."
Honestly, for Blu-ray to ever really get a foothold, it's going to need to literally replace DVD. In other words, Iron Man comes out ONLY on Blu-ray. No DVD SKU at all. Wall E comes out ONLY on Blu-ray, no DVD SKU. The Dark Knight comes out ONLY on Blu-ray...get the picture?
But we can't do that and the studios never ever will. DVD is just far too entrenched and there's no chance in hell that a blockbuster movie won't have a DVD release. Quite honestly, you could give Blu-ray players away for free. Just hand people the player and sell The Dark Knight on Blu-ray for $5 and people would STILL complain! Why? Because of the hassle of having to connect a new player. Free player. One plug to the wall and one HDMI cable to the TV. $5 Dark Knight in high def. Nope. Not interested. Too much hassle. Just give me the damn $15 DVD.
That's the market. That's the mindset. And the kids? They aren't going to buy anything. They expect it for free and they'll watch it via YouTube quality streaming or a pirate bit torrent on their 2" iPod screen.
So that's why I'm so adamant that us movie nuts, we Audioholics better buy up all the Blu-ray movies we possibly can while it's still around! I'm rather convinced that this is the absolute highest quality we are EVER going to see in our lifetimes and it's a blip. A tiny blip in history. The seniors don't care. The kids don't care. Only a tiny portion of us in the middle care and the rest of the middle thinks Blu-ray looks and sounds no better than DVD.
So the Blu-ray camp could give the players away and it still wouldn't make a difference. Heck, HD-DVD basically did just that! $99 players and 5 free movies (basically a player for free) and look where that got 'em! What did average people remember most about HD-DVD players? They made regular DVDs look a little bit better with good upscaling! THAT was the selling point! Not the HD-DVD discs.
People don't want a new player. The Blu-ray players could be free and the Blu-ray discs could be priced lower than DVDs and people still wouldn't want them. The simple hassle of adding a new player is enough to drive them away and they're not interested in having a split library of discs that don't work on all the players they already have in each room of the house.
DVDs are it. Only something like Vudu is going to get any average person's attention. It's all too complicated for grampa and the kids think Vudu is a rip off because it isn't free.
The End