Downloads ARE chewing into the DVD market it shrunk 3% this year - Next year it may be another 3-5% . Downloading will take 5 years to eat away even half the DVD market.
Blu-Ray disk with the AVC and VC-1 codecs cant be compressed any further without a huge loss of quality. This means retail/hire and the optical disk production/distribuition business which exist will be around for at least another 10 years.
Yes downloading inferior copies of movies will be common by 2020 (assuming terminator type robots dont take over the world ) but optical disk will probably still dominate past 2020 by offering features like Stereo Vision or 1080p60 using 100-120Gb 4 layer blue ray (which the PS3 can in theory handle and display over HDMI ). Optical Disks have A nice cover and the fact that they dont head crash or suffer failure like Hard Drives makes them very convenient.
Note Xbox360 needs both Hard-drive addon and cheap broadband to download content. The PS3 is equiped standard with gigabit ethernet/Wi Fi wireless AND built in hard drive too, and i suspect pay per download viewing will be available for PS3 in some regions also like the Xbox.
MS would definatly miss out on some sales if they dont eventually bring out a Blu-Disk add on so i think they will by 2009.
PS3 number 1 fan
