DisplaySearch Director DVD and HD Market Research, Paul Erickson, says that while Blu-ray can claim a "victory" in the next-gen DVD format war, it doesn't mean consumers will start buying Blu-ray hardware and software in mass quantities for some time.

"As noted by both NPD consumer surveys and previously published DisplaySearch opinion on the subject, the mainstream consumer remains conservative about buying next generation DVD in the face of existing satisfaction with DVD and perceived high prices for next generation hardware and software.

"Much industry rhetoric, particularly after the Warner move before CES, has pointed to format war confusion as a large cause of the decline in overall DVD revenue. This is at direct odds with NPD's consumer survey results. The reality is that the end of format war confusion will neither boost an already saturated and naturally declining DVD market, nor suddenly spur mainstream Blu-ray uptake," Erickson says.

DisplaySearch expects that mainstream adoption of Blu-ray will rely on affordability, it also predicts price levels to decline more slowly now that the competitive influence of HD DVD is diminishing.

"2009 is likely to be the true year that the multiple appeals of price, content and industry support generate overall resonance with the mainstream consumer," Erickson says.

DisplaySearch warns that DVD stand-alone player makers must remain wary, as the environment for delivering high definition content is considerably more competitive than the environment faced by DVD when it supplanted VHS. This competition includes Pay-TV companies implementing plans to deliver HD movies on demand, Microsoft's Xbox Live Marketplace, and Sony's plans for monetized HD content delivery to PlayStation 3s. The company also points out that the quest continues to find a sustainable, successful way of delivering HD video over broadband either to a PC, media centre or dedicated set-top box (such as AppleTV or Vudu), though packaged media won't be displaced for some time due to DRM issues.

"The industry should study the lessons learned from the format war, and continue to be aggressive in hardware and software pricing in 2008 and 2009 regardless of whether HD DVD is present as a competitive influence. What is financially healthy for studios and consumer electronics companies over the short term may prove counter-strategic to the long-term success potential of a next generation DVD market that is only one of an increasing number of ways that consumers can view high definition content," Erickson adds.