One of the biggest flaws with Blu-ray is the fact that it requires brand new pressing plants to manufacture the disks whereas HD DVD can be made in existing DVD manufacturing facilities once the equipment has been modified.
Like it or not, HD has to survive alongside DVD for the forseable future and that means manufacturing facilities need to be able to press both HD DVD and DVD disks to turn a profit until HD disks are sold in higher numbers.
It's so much easier and cheaper to produce HD DVD that all blu-ray can do is hinder the rate at which HD DVD can replace DVD. I don't see any possibility of Blu-ray becoming the "standard" under these circumstances. Blu-ray need consumers to abandon DVD and move exclusively to their new format and that is not going to happen any time soon.
Sony are the only company investing in these new expensive blu-ray installations so far and we are already seeing delay after delay as they struggle to produce reliable disks and they invented the format!
Studios will become increasingly frustrated with the problems that the blu-ray manufacturing process exhibits and it will only take one or two more neutral studios to go HD DVD exclusive to cripple Blu-ray entirely.
I appreciate your thoughts but studios couldn't care less about bit rates and capacity. What they care about is profit just like every other business and they can make a lot more money with HD DVD than they can with blu-ray.
I don't know who will win but I honestly don't believe things are going well for blu-ray and I will be very surprised if they can.
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