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Various reasons did in my opinion;
-The battle between HD-DVD and Blu-Ray took a long time and it made consumers wait (too) long.
-HD-DVD could have been produced by any DVD-plant with a small 50K adjustment to their existing machines, instead of buying new 2 Million dollar machines to replicate them. This drove the production and sales prices up by factor 10 or 20.
-Economy went down in that period and people chose normal dvds over the expensive blu-ray's.
-Less creditcards in the market, less credit and less spending by consumers.
-HD TV channels/broadcasting and HD VOD started around the same period on all cable providers, set-topbox providers and satellite providers, next to the internet offering HD now also.
-Numbers of stores are decreasing worldwide, in retail and rental both (adult and non-adult). Less outlets means less sales, therefore also less Blu-ray would be sold by distributors.
-Credit insurance companies and factoring companies don't insure the (offline) DVD business anymore (adult AND mainstream). No dvd plant, distributor, wholesaler or retailers will they accept as a client or insure them.
-For adult, the image quality might be TOO sharp and users see the emphasized zips and details, which is nice if you are watching BBC's documentairy "Earth", but not an xxx movie for many users.
-Internet, mobile and TV wiped out the DVD business, it's done. It's on life support currently. Maybe 1 year to go or 3 max for some bigger studios maybe, if they have good sales, high prices AND a good brand with a big fanbase. But after these 3 years, I think it's over and out like betamax, vhs etc. saw happen before also.
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