Blu-ray's Time Comes as DVDs Fade

Blu-ray is emerging as a holiday hero for Hollywood as the film industry grapples with the rise of online video and a persistent slump in its most profitable source of revenue: DVD sales.

A combination of the weak economy, online piracy and low-cost rental and streaming services has driven continued declines in DVD sales this year, but strong growth in Blu-ray—premium-priced discs that offer a higher-quality home viewing experience—suggests consumers still have an appetite for physical home-movie products.

The trend has led some to question whether the electronics industry’s embrace of Internet-connected television sets and set-top devices has come too early, leaving consumers confused by the myriad of technology choices and content limitations of online video. That prospect has fueled concerns that the industry might not be allowing its Blu-ray business to live up to its potential.

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