Quote:
But these new DVDs? He doesn't see the difference. It's the same size. It all looks the same to him. He's going to stick to what he's got.
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Mr AC is a simple person. He has DVDs now. If he's going to switch to something because he's hearing that this "high definition" stuff looks good, well, there's that "HD-DVD." That makes sense to Mr Average Consumer!

My two cents:

Your first argument about it looking about the same is going to carry the day. Normal DVDs on HD sets look very good. The extra goodness of HD is harder to sell. Most people, if you did double-blind tests, would certainly be able to tell you what's better. On the other hand, if you did a test where you showed somebody a movie and asked "is this DVD quality or HD-DVD quality", they wouldn't be able to say. Same deal with SACD / DVD-Audio. Most people are quite happy with plain old CDs, thank you.

As such, I expect Blu-Ray/HD-DVD adoption to be very, very, glacially slow, until the cost is effectively zero, as it is today with DVD players (go ahead, just *try* to buy a CD player at Best Buy -- it's easier to just get a DVD player and use it to play CDs). I'd expect faster adoption from the computer crowd, looking to do backups and whatnot.