Blu-ray: Playing for a Limited Engagement?

The technology's staying power is in doubt now that Hollywood is working to expedite video downloads

Blu-ray, we hardly knew ye. Consumers are starting to buy video players for high-definition Blu-ray discs, and sales are expected to rise sharply in the next few years. But already some of the technology's backers say its days are numbered. "I think it has five years left," Andy Griffiths, a director of consumer electronics at Samsung, the second-biggest seller of Blu-ray players, told the media this month.

Why the dire forecast? After all, Blu-ray triumphed in the battle for a high-definition standard with HD DVD less than a year ago. But now consumers are warming to the idea of getting movies and other video off the Internet, and for the first time, major studios and their partners are rushing to accommodate. On Sept. 12 a consortium of some of the biggest names in tech, including Intel (INTC) and Hewlett-Packard (HPQ), announced they would collaborate with Hollywood on standards to make it easier for consumers to download and view copyrighted content on all manner of devices. "It's all about consumer freedom and consumer choice," says Mitch Singer, president of the consortium, the Digital Entertainment Content Ecosystem.

Getting movies off the Net involves plenty of hassles today. Downloads can take forever, selections are limited, and piracy-protection schemes make it tough to move a movie you get on a PC to a TV. But the consortium intends to work out these issues as quickly as possible. "The traditional content owners had an epiphany and realized they could no longer afford to dillydally in moving their businesses into the Internet Age," says Carmi Levy, senior vice-president at consultant AR Communications.

Blu-ray has a bright short-term future. Research firm Gfk predicts sales of Blu-ray hardware and discs will quadruple this year, to $1.5 billion and hit $8 billion in 2010. Sony (SNE), the technology's main backer, predicts the strong demand will continue. Blu-ray will be the best choice for high-definition content "for the foreseeable future," says Chris Fawcett, a Sony Electronics vice-president.

But it may get increasingly difficult to persuade people to buy Blu-ray players, which run about $300, as they find it easier to get high-quality movies off the Net. "Blu-ray is probably going to be the last physical [product] where you walk into a store, get a movie in a box, and bring it home," says Levy.

    Before it's here, it's on the Bloomberg Terminal.