I think the article's conclusions are correct. The biggest challenge is simply convincing consumers that HD-DVD/Blu-ray will offer that much more than DVD, especially since less than 20% of U.S. households currently own HDTVs. The upgrade between VHS and DVD was obvious and multifaceted. The DVD is a compact, random access format that gave just about everybody a noticeable improvement in picture quality, 5.1 audio, and connectivity to their computers. HD-DVD/Blu-ray do not offer up a substantial improvement in functionality, and the technical improvements are only noticeable to consumers who already own HDTVs.

The problems with HD-DVD/Blu-ray are many. First off, the DVD format was created on the assumption that it would be an interim format. Dangerous thing to assume because consumers that have already invested in the hardware and populated their disc collections, are not going to necessarily go through the whole upgrade cycle again when the DVD format has been out there for less than 9 years, and only passed VHS in market share less than 3 years ago. Problem with creating an "interim" format is that it very well might become an "interim" format that last more than 20 years like VHS dominated for about 26 years.

With the HDTV standards adopted in 1992, everybody knew that a HD-disc format would eventually come out. The question that I've always asked is why rush the DVD format into the market when everybody saw that the TVs of the not-so-distant future would have HD resolution? If the DVD had been introduced as an HD disc format from the beginning, it would have avoided the mess that HD-DVD/Blu-ray are in right now with a format war and very uncertain market prospects. Even if most consumers don't own HDTVs, a DVD format with HD from the beginning still would have given average consumers the random access, bonus features, surround audio, and compact size -- more than enough reasons to upgrade even without a HDTV.

As it stands now, Blu-ray and HD-DVD are working from a market base of less than 20% of the total audience, because the only tangible benefit (aside from higher resolution audio that has yet to be implemented) is the higher picture resolution and to attain that benefit requires a HDTV. Compare that to the DVD format, which had almost 100% of the viewing audience as a potential customer.

And with that ~20% base, Blu-ray and HD-DVD have further eroded their target market by including a forced analog downsampling key that, if activated, would require a copy protected digital video connection for full HD resolution. This would leave about half of the existing HDTV owners out in the cold, because those early HDTVs came with analog component video connections only. For now, the key has yet to be activated on any HD-DVD or Blu-ray discs, but the word has gotten out and the response involved a lot of four-letter variety.

Oh, and then there's that absolutely idiotic silliness with the format war, which leaves even more potential customers sitting on the fence because not too many consumers want to spend $500 to $1,000+ on a machine that might become an obsolete relic within the next two years. The market might eventually take off as the dust settles and/or universal players that can handle both formats become available. But, in the meantime, as this pissing match drags on and drags the market down with it, other HD viewing options like on-demand and downloading get closer to reality.

If these resources had been marshaled towards a unified HD-disc format from the very beginning (i.e. with no "interim" DVD format in the meantime), that format very well might have locked down the market and spurred the HDTV growth a lot sooner. As it stands, those of us who choose to watch our movies via disc media might be stuck at 480p for a long time.