Buy-Ray will be around in 2012 and well beyond, that's been as good as certain and pretty much guaranteed since the PS3 launched.
The internet experience will improve further, as well as the Blu-Ray movie experience will advance including optional updates over the internet. I look at this far less extreme than many (like only one having the potential to becoming successful), IMO there's a market for both approaches.
Retailers want to sell games and movies on disc media (of course big corps would love to cut out the middle man though combined with super cheap/easy delivery), most consumers seem to prefer to have their high profile movies and games stored on disc media (maybe with optional install, scratch protection is welcome, nice cover, etc). There are IMO however great opportunities for budget content delivery over the internet.
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