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I'm not sure if digital distribution is the future just yet...but there are already many people like me that only download movies/songs and rarely rent/buy them form stores.

This means that bluray is already chasing a smaller market that DVD did backin 2001. Also, due to lack of HD televisions in 100% of homes and blurays somewhat high price point, it even has smaller potential market to conquer that DVD.

Conclusion: Physical media peaked with DVD's.