Five Reasons to Hold Off on Buying Blu-ray

Blu-ray's competitor, Toshiba, waved the white flag on Tuesday, announcing it would no longer make or sell HD DVD players and recorders. The move followed two months of swiftly eroding studio and retailer support for the technology. Warner Bros. Studios, Netflix, Blockbuster and Wal-Mart all reported that they would phase out HD DVD in favor of Blu-ray.

"It's been clear from the onset that no one wanted two rival formats, except the companies promoting those formats," says Jim Willcox, electronics editor for Consumer Reports. "It was a game of chicken, and Toshiba blinked first."

Ultimately, it's a relief for battle-scarred consumers who are eager to buy a high-definition player without worrying whether the format they choose will become obsolete. However, that doesn't mean you should jump on the Blu-ray bandwagon just yet. A new round of competition and price cuts, as well as the fact that the Blu-ray technology is still evolving means that, for now, it's better to hold off and wait for the technology to mature and prices to be slashed. "You've waited this long, you can wait a little longer," says Willcox.

Here are five reasons why you should wait to buy a Blu-ray:

"The format war took so long that the industry decided to move on," says Rob Enderle, principal analyst with the Enderle Group, a market researcher. "Studios started looking for something else, because neither HD DVD nor Blu-ray was bringing in revenue."

With on-demand Internet download services like Netflix, Amazon.com and Apple gaining momentum, Blu-ray is a hard sell to consumers who are watching their wallets. A 40GB Apple TV box, which streams video from your computer to your television, will set you back $229, roughly 40% less than the least-expensive Blu-ray players. The cost benefit of these services doesn't stop there: A new release high-definition rental on the Apple TV system runs $4.99 for 24 hours, while buying a single new release on Blu-ray disc will set you back about $35.

"We've yet to see and see how the living room vs. PC battle will work out," says Cooley.