It's sometimes a challenge to understand how arguably better technologies often lose out to things that are inferior. We've seen it time and time again. The problem is that consumers are often not interested in the "best" technology but are more than satisfied with that which is "good enough". These days, a good example would be to look at Blu-Ray and how it's being adopted by consumers.
We're now well past the point where HD-DVD was vanquished by Blu-Ray, and this year at CES we're finally seeing lower cost devices and content that's flowing on a regular basis. Yet, in the long run it may well be Blu-Ray has won a Pyrrhic victory and it may well turn out once again that the best is the enemy of the good. I'm not suggesting Blu-Ray has failed or will fail, but it's the type of technology that faces exactly this type of challenge from the "good enough"
Let's go back in time for a bit. At the end of the 2001, there was a major effort to drive consumers beyond the ubiquitous compact disk and drive them to one of two new formats, SACD and DVD Audio. Both were optical disk formats designed to replace the existing CD standard and, at the same time, drive replacement cycles for both hardware and software. In the end, neither format prevailed and despite strong efforts from both sides, consumers remained with the CD as a standard while at the same time embracing the MP3 format for music (along with the iPod and other MP3 players), a format of lesser quality than the CD.
So how does a technology shift and cross the threshold for adoption? The ability to drive consumers to new technology is a difficult task requiring several key things to happen at the same time.
First, there requires broad unified hardware support. In the case of Blu-Ray this didn't happen soon enough. Vendors were split with no unified standard, and instead created a format war that caused confusion among consumers. This initially held back adoption for consumers who waited for the market to sort itself out.
Second, deep content support is required. Even as Blu-Ray content now flows in some numbers at last, there's far more new content available on DVD than on Blu-Ray, which also sells at higher price points for the same titles.
Finally, there needs to be a clear and visible consumer value proposition. CDs and DVDs both offered a clear value proposition to consumers. There was a visible difference in the experience that was easily grasped. Both were marked by a shift from analog tape format to disk, which was more reliable and offered novel features such as random access to content. Both offered clear quality differences than what came before and the quality was well above the threshold for just noticeable differences. Consumers still do not see the same value proposition with Blu-Ray, especially when cheap, up-scaling DVD players make their existing content look "good enough".
Even as consumers still embrace their DVDs, the growth and penetration of broadband is facilitating content to be delivered directly to consumers without the need for any optical disk. Combined with portability and the ability to move content from room to room as well as onto portable devices, the market for downloaded video content continues to grow each day and more of that content is in Hi-Def format.
With pressure coming from DVD on one side and the growth in connected TVs and streaming content, consumers may opt once again for the “good enough” experience and never make the mass market leap to high definition optical disks.