At CES this week, Panasonic demoed the first Blu-ray player that’s capable of making the jump from 1080p content to true 4K via the H.265 codec standard. It’s a huge step forward and a necessary one, given the age of the 1080p standard — but it’s difficult to tell if it’s going to be enough to save disc-based media.

The current Blu-ray specification relies on a codec known as H.264 for encoding the video stream. H.264 offered much higher quality than the MPEG-2 standard it replaced and was quickly adopted for both disc-based media and streaming content. As 4K content has begun to creep over the horizon, however, the limitations of H.264 have become clear. While it offers excellent characteristics for 720p and 1080p streaming, 4K video encoded with H.264 is too large to fit most movies on a single Blu-ray disc and consumes too much bandwidth to be practical for streaming to a huge number of simultaneous users.

It’s not clear if the industry would choose to back higher-density discs using H.264 for 4K video, or if companies would instead opt for the new H.265 standard. Choosing the newer codec is almost certainly the better option, but it means the majority of BD players on the market today probably can’t handle the newer codec. Unlike H.264, H.265 is designed to be decoded by a quad-core Cortex-A9 or equivalent processor and most Blu-ray players don’t sport that much CPU power under the hood.

Blu-ray under siege

The larger question, however, is whether a new Blu-ray standard can succeed at all. Digital Digest has discussed this topic extensively, with year-on-year comparisons of Blu-ray sales, market revenue, and total market share. The current results don’t paint a pretty picture for the long-term future of the disc standard.

Blu-ray’s disc scare (the number of Blu-ray discs sold vs. DVDs sold) has flatlined, with minimal growth throughout 2014. The current record was set by the release of The Avengers in 2012, with 44.10% of total sales flowing to Blu-ray — a mark that’s never been matched, though Frozen came close this year.

This graph is harder to read, since the dips and troughs don’t match each other exactly, but absent the Frozen-driven bump at the beginning of the year, Blu-ray sales lagged in 2014 compared to 2013. 2014 was the first year that Blu-ray sales declined since the standard debuted in 2006, from 2.306B to 2.12B.

Cinephiles and physical media collectors will likely argue that these trends don’t matter, given that billions in sales is still billions in sales. While it’s true that there will always be a certain segment of the market that will pay top dollar for high quality (and that disc-based media is far higher quality than current streams), the modern disc-based media market depends on critical economies of scale.

For an example of what happens when a standard doesn’t achieve broad market penetration, look to LaserDisc. While it had many advantages over VHS players of the day, including initially lower production costs, the low number of players sold and small market share meant that the film industry didn’t invest much money in bringing titles to the format. The fewer titles are available in a format, the less consumers are going to be interested in investing in it.

When you combine this with the fact that 4K content requires larger screens and different televisions to really shine compared to 1080p, the already dubious upgrade argument gets worse. Consumers are going to upgrade to 4K televisions, but no one is projecting a repeat of the 720p and 1080p craze when the market collectively leapt from decades of broadcast television all the way to HD content. This suggests that the shift to 4K Blu-ray will occur much more gradually, which gives streaming services more time to establish themselves and a larger window to bring stream quality up to snuff.

Based on current market trends, it’s entirely possible that the 4K variant of Blu-ray will emerge as little more than a curiosity — interesting to a handful of people, but without the critical mass market support that would drive adoption across the entire segment.

Now read: H.265 benchmarked: Does the new codec live up to expectations?