Quote Originally Posted by klif570
I see what you're saying, but I don't think VHS and DVD is a fair comparison. VHS is not even a disc, it's inconvenient to use, it's bulky, it's unattractive. DVD and Blu Ray are exactly the same apart from Blu Ray being higher quality. I see it more like SACD vs CD
Don't get overly fixated on the physical form factor. The similarity between the VHS/DVD and DVD/Blu-ray coexistence is that both situations require retailers, studios, rental outlets, mail order sites, etc. to maintain dual inventories. In these cases, the newer format is more lucrative because 1) consumers are willing to pay more for the improvements; and 2) the newer format can draw revenues from sales of catalog titles, whereas the older format increasingly relies solely on new releases.

If anything, VHS's pricing structure (which featured a two-tiered rental pricing and sell-through pricing window, along with revenue sharing agreements with the major rental chains) protected the format even with rapidly declining demand.

The DVD is now a devalued format with lower margins because consumers simply will not pay as much as they used to for a DVD. A devalued format can still justify staying in print if it can maintain a high enough volume to make up for the reduced margins, but DVD sales have been declining.

The SACD analogy does not apply because:
1) SACDs never had day-and-date releases like you see with Blu-ray
2) SACD was supported by less than half of the major record labels, whereas Blu-ray is now supported by all of the major movie studios
3) SACD was supported by only a handful of the major consumer electronics manufacturers, whereas nearly all of the major manufacturers have put out a Blu-ray player
4) Blu-ray's market share is way higher than SACD ever had

The market conditions for Blu-ray are way different.