Just to correct another misconception, Betamax didn't fail as such - it eventually lost out to VHS in the home VCR market, but it achieved massive success in the professional arena, where it was used for years (still is in some forms).
As to why it eventually lost to VHS in the domestic VCR market, you can't necessarily assume what happened in the UK represents exactly what happened worldwide. VHS' eventual victory in the home VCR market was down to a combination of factors worldwide, not a single one.
One thing to note is that the VHS vs Betamax war rumbled on for years - some say it was effectively over in 1988 and some say 1993 (when Sony ceased production outside of Japan) - but either way, it lasted at least 12 years, maybe more.
That said though, while there are certain parallels you might draw, I think it would be a mistake to assume that the BluRay vs HD-DVD war is just a rerun of the VHS vs Betamax war.
As to the original topic and this rather ridiculous report (must have been a slow news day).
This battle has only just begun - it's far from over (borrowing a phrase, it's not even the end of the beginning yet).
With total joint sales of hidef discs projected to be 0.5% of the total global DVD disc sales market by year end, and just 1% of the US market, the numbers are far too small for either side to deal any kind of a death blow to the other - and the numbers are far too small for either camp to claim they have reached "critical mass" and so can't be defeated.
The issue which predictors of HD-DVD victory always sidestep in seemingly Blairesqe fashion
, is the one of studio support - specifically the fact that many more movies won't be available on HD-DVD than won't be available on BluRay.
The argument that HD-DVD may currently be outselling BluRay, so BluRay studios will have to bow to the pressure and start selling on HD-DVD, is wishful thinking IMO. There is no pressure, not based on current market numbers. In fact there isn't even any pressure to actually release on hidef at the moment.
It seems the studios are looking at the long game, while many observers want the war to be over in the next fortnight.
Of course, it could all change, but these internet rumours have been around for ages, and so far have never come to anything. In many ways, it might be better if all the studios supported both formats - at least the consumer could make up their own minds (or could they?
), however, I think this very unlikely, at least in the next few years (and in the case of one studio, probably never).
On a related note on the takeup of HD in general in the UK - at the beginning of November, Sky announced that 96000 people had taken it's HD service in the first six months. Out of 8M subscribers, this represents just 1.2%.
If these kinds of numbers are repeated for HD-DVD and Bluray, then we could be in for a long wait before any victor is declared, if ever.