L.V.
It's possible he's just not ready to read. For a lot of kids, that lightbulb moment doesn't happen until 6, 7, 8, or sometimes even later.
However, I would second the eye exam suggestion, just to rule that out. It could be a simple vision problem.
I would also look at the Leap Frog video, especially Letter Factory. I'm not a big fan of video learning either, but this video is really good. My daughter learned all her letters and sounds at 2 and a half just by watching the video a few times.
Good luck! Every child develops at his/her own pace. He'll really take off when he's ready.