What if they both lose?

Sure, people will buy millions of systems that play HD DVD and Blu-ray. They’ll have no choice. The technologies are built into the Xbox 360 (HD DVD; it’s an add-on) and the PlayStation 3 (Blu-ray). So there’s little question that by this time next year, millions of people will be able to play high-def movies in HD DVD or Blu-ray formats, perhaps through their game systems. That is, if they want to.

But I’m starting to think maybe they won’t want to.

That would mean an odd type of failure for the formats. People would have the ability to play the new, special discs, but perhaps no desire to go through the trouble. They might choose not to upgrade for different reasons. Some might want to avoid picking the wrong side in a format war, and being left with a bunch of expensive and irrelevant equipment. (Remember LaserDisc?) Some might not want to buy their whole DVD library over again for an incremental improvement in picture quality.

To check this hunch of mine, I gave a call to the ever-quotable Rob Enderle, longtime Silicon Valley consultant and analyst with Enderle Group. Turns out he’s thinking the same thing about the problems with both HD DVD and Blu-ray.

“Right now, particularly with regards to content, it isn’t where it needs to be, to be compelling,” he said. In some cases, he pointed out, you can get better image quality just by using a standard DVD player with an upscaler.

“I was in a room with a bunch of other analysts and was with one of the Blu-ray proponents,” Enderle told me. “I asked, ‘How many think Blu-ray’s gonna win?’ No hands went up. Then I asked, ‘How many people think that neither one of them is going to win?’ All the hands went up.”

Ew. Not good for Hollywood – especially since studios are banking on all of us going out and repurchasing HD versions of the DVDs we already own. If my hunch is right, they’re going to have to go back to the drawing board and come up with formats that deliver more “wow” factor – either that, or come up with some miraculous firmware updates for the current crop of HD players.

But for now, Enderle agrees, it doesn’t look so hot for the backers of HD DVD and Blu-ray.

“It just isn’t compelling enough yet,” he said. The masses of regular folks in middle America aren’t likely to pick sides in a format war this holiday season, and spend $450 – $1,000 in the process. As usual, Enderle put a nice, fine point on it. “Nobody wants to pay a premium to look stupid.”