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The amusing thing here is that most are focusing on availability of bandwidth and costs of wide band speeds necessary for downloading double digit GB downloads in a practical amount of time and factoring that as the sole cost of viewing High Def movies while completely ignoring the cost of the media itself.

There are two subscription fees. Your ISP fee and either a monthly rental fee for media, or individual title purchase fee.

Since some insist on using the music industry model as a portent for the video/movie industry, I'm guessing the same people that only factor network fees into their entertainment fees aren't planning on actually paying for any of their media. Considering that the vast majority of all music that is downloaded is not legit/purchased, it's easy to see why some people would think this.

This is the reason why MS charges primarily for rentals with options to buy permanent viewer rights, but only tied to an individual machine. I don't know why Marketplace purchases aren't tied to user accounts instead, but this is similar (only much more limited) to the DRM system Apple initially used with music bought through iTunes.

The problem with DD files is that because they will always be more compressed in the interest of increasing transmission speeds on a per file basis, they will always be of lower quality than those published on hard media. It doesn't matter if you burn your illegal file to disc after downloading it. That makes no sense to me personally. And I don't consider a 5GB 720p movie file anywhere near on par with a 1080p HD DVD or BR D file.

Not too many people are willing to pay money for lower quality output, particularly when the sole purpose of HD formats are for increased quality output.

Now if you're simply bit torrenting all your movies (of ripped HD DVD files) illegally, sure; anything is good if you're not paying a cent for it. But does anyone actually believe the future of distributed media is based upon the free/stolen standard? There's no money in that for the studios that produce the content.

Musicians can adapt to this by taking in their percentages from tour receipts and merchandise, but the parallel to this in the film industry would be what? Find a way to make more money at the box offices?

Everyone knows the only reason why many studios stay profitable is through DVD sales after the ticket receipts are totaled up.