DD is the future (as much as I hate to admit it, physical media FTW!), it's just the future AFTER Blu-Ray, and won't be mainstream for at least four years.

Once I can set up a Steam-like account that will have a record of every movie I own, and allows me to stream the movies anywhere I'm logged in, and I have the capability to stream 1080p video instantaneously, maybe then I'll be okay with DD. Even then I'll miss my cases, and the ability to loan out movies, or play them where there is no internet.

I have to comment this. I am sick of all these "digital download is the next new wave for movie format" articles.
I doubt severely that Digital download will ever become the de-facto format. It is true, blu-ray might not make it as big as DVD.
Okay, here are my reasons for Digital Download not making it.
1: There is not even a 70% adoption for internet in households in the US. let alone the rest of the world.
2: There is currently less then 60% broadband use within the less then 70% who have internet. (source: http://www.websiteoptimization.com/bw/0804/)
This means that 40% of all internet users could not get digital movies in a resonable time, people want to watch movies now, and not download for 2 weeks.
3: People like to own thier hard copies of movies, be it betamax, VHS, Laserdisk, DVD, DivX, HD-DVD or Blue-ray.
( I know the same was said for music, But mp3's are small in size and everyone can get them free if they want to, I go to say that NAPSTER was the reason mp3 players became the new defacto way to listen to music)
4: It would be more likely for a different format like flash media to be the new source then digital download because of the lack of poeple able to get those downloads.
5: Finally, Hight def movies take up a lot of space and most set top boxes would barely have 1TB of storage and that would only give the average person about 40 movies if they were 25gigs a movie. I know you can have HD 720p movies for around 5 gigs but that is with plain jane Dolby Digital 5.1 sound and won't give you a real HD upgrade.

Digital downloads are the shit.You dont have the full property,you dont have cover ,extras ,anything ,plus to keep the films you must transform into a HDD warehouse.

Rent is one thing ...but for property digital downloads arent a good idea.

 Although that comma still works, it's highly unnecessary. I suppose, that you were trying to make a point (at least, I hope that it was because you were trying to make a point).

Arguments about connection speeds just don't hold up anymore. The BBC iPlayer streams TV quality video as standard, and the High Quality picture requires a whooping 1MBPs connection. 3/4 people in the UK have a broadband connection, and by 2012, 30-50MBPs lines will be available to the majority of the country, with >GBPs connections available cheaply in most cities and large towns. Japan and Sweden are already there, and I remember reading about similar projects in Australia.

I predict that by 2012 on-demand high definition content will be accessible to all of Western Europe, Japan, Australia and most of urban America (USA + Canada). For the record, I personally predict that the UK will be there in 2010.

You've got that last part backwards. Blu-ray is now, and digital is the future.

Blu-ray is really the best thing Sony has going for it right now. The adoption is coming along pretty well. Better than I thought it would.

Digital distribution has all the technology it needs, all that's missing is a business model that really works. The biggest stumbling block is that the content providers are afraid of it, just like they were afraid of mp3s. Blu-ray doesn't scare them, so Blu-ray will rule for the next few years until somebody cooks up a business model that does for videos what iTunes did for audio.

Blu ray will be fine for at least 5 years, nothing to worry about

That article hurts my head..

 I think the big stumbling block with the business model is that most people like to get their content on the web for free. They've grown accustomed to Hulu, Youtube, BBC iPlayer, Joost, ITV Player, 4oD, etc... where they can watch what they want for free, whenever they want.

I think Virgin may have it with their business model, though. Subscription based. People feel like they're getting a good deal because they can watch whatever they want, however much they want, but Virgin know they're winning, in the end, because the novelty dies off, yet they're still stuck in a contract.

I'm about to do a little maths:

I discovered that Virgin have to pay Sky 1p per viewer per time slot when someone watches a Sky channel on Virgin Media. Now, let's assume that these rates translated through to on-demand TV (and why shouldn't they?).

Let's also assume that a customer is really sad and decides to watch 24 hours of content for 31 days. That equates to 744 hours, or 1,488 half hour time slots. This would mean that this customer would cost the company £14.88 in royalties. The firm could then charge a subscription fee of just £15 and making 12p on top of royalties.

That isn't profit, of course, as you still have running fees, but whacking an unstoppable advert at the start or end of the program could cover those costs, and the costs would become diluted with the more customers received. And, obviously, no one is going to be watching that much TV in one month.

Get 5-6 million customers watching 4-5 hours of TV a day and you'd be quids-in.