Update: I was right!
We have repeated history and now have another format war much like VHS vs. Betamax, but now with digital technology instead analog. The uncertainty about which format would receive mainstream adoption has made most people avoid the move to high definition altogether until everything is sorted out. After all, to most people including myself, High Definition content is good looking and nice to have but there is no reason to go out and drop several hundred dollars when current standard definition is not unbearable and easily accessible without considerable investments in technology that may whither and die by next year.
Time Warner, knowing this, has recently decided to only release their HD movies in the Blu-Ray Disc Format. Until this point, the battle seemed to hang in the balance, but this recent move I feel will put the final weight on the Blu-Ray side, despite it’s more expensive manufacturing costs. With the majority of content providers behind Blu-Ray it will become increasingly difficult for HD-DVD backers.
There are still two ways that this can finish. The first way is a Blu-Ray only future, much like VHS overtook the market against Betamax. Sure, HD-DVD will still be around, but the majority will choose Blu-Ray. Or the alternative, a multi-format future which would end up being more expensive in the long run for both content providers and consumers.