Bluray (and HD-DVD) came out just a couple years before the big decline this article discusses, which is about the time they would have needed to get past the early-adopter stage and start making a significant market impact. These were the premium formats that were supposed to draw in people with their superior quality and command a premium price with a correspondingly premium net profit. These formats have not flopped, but neither have they given Hollywood the boost they were looking for. In fact, I'd be surprised if Hollywood execs aren't rather disappointed with Bluray sales.

The problem now is that DVD's are widely seen as an inferior format. Superficially, they have all the disadvantages of Bluray with inferior quality even to online streaming. Sure, they're pretty cheap, but not cheap enough to justify the lack of both convenience and quality. If online streaming killed DVD sales, Bluray was certainly an accomplice.

The reason Bluray hasn't gained as much traction as Hollywood hoped is that, in practice, its even more inconvenient for users than DVD's were. Bluray's are saddled with DRM so onerous that movies can take minutes to load and only a player with an internet connection to obtain updates has a chance to play the newest titles. Bluray discs almost universally have inferior user interfaces to DVD's, and the consistency is awful. BD-J discs often break basic player functionality such as auto-resume. On top of it all, Hollywood has continued to pile on more and more warning screens and advertisements. One of the selling features of the Bluray format, according to Hollywood, is that Bluray discs can download fresh new trailers online and show them to users instead of simply playing old trailers loaded on the disk. Yes, only Hollywood would call a program that downloads ads and makes you watch them a feature!

Compare this to online video. The quality is still inferior to Bluray, but it won't be that way forever, or even much longer. Arguably, the quality edge Bluray has is already pretty slim on the majority of display's people are using.

Hollywood should be serious about keeping Bluray competitive with online video. They make a lot more when you buy a movie on Bluray than they do if you watch it on iTunes. However, they clearly aren't. How do we know? They keep updating the encryption on Bluray discs, forcing people to keep up with updates to their players even though the updated encryption is frequently broken before the Bluray's using it officially go on sale. Every time a user has even slight difficulty playing a movie they just paid good money for, you drive another nail into the coffin of the Bluray format. They keep piling on trailers and warning screens. It still takes minutes to get to the movie with many Bluray's. Onerous anti-piracy ads are still being shown to the very people who have just paid for their content! Bluray menu interfaces remain inferior to those of DVD's, and consistency has not improved.

The obvious answer for Hollywood is to treat their best (i.e. most profitable) customers like their best customers, but this is simply not being done. Instead, they're looking for the next big thing to fix everything. 3D Bluray's! 4K video! 3D fatigue has already had an impact on cinema sales, but it'll be great in the home! (Disclosure: I own a 3D projector and have yet to watch more than 10 minutes of 3D to verify that it works). Yes, 1080p isn't good enough! 4K will be the savior of Hollywood, nevermind that the average viewer can't tell 720p from 1080p! The number is bigger, so they will come.

It's pretty hard to feel much sympathy for Hollywood these days.