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Not just MS is pushing for downloads to go mainstream, Apple, even....hold your breath......Sony.

Quoted from article linked below:

"Sony is finally starting to realize that compressed, downloadable movies -- as opposed to physical media like high-definition Blu-ray discs -- are the way of the future."

http://www.thestandard.com/news/2008/07/01/sony-s-blu-ray-will-keep-them-winning-new-format-war

sorry fixed link.