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MikeB:

I think only the dumbest DVD retailers and rental services will push for Blu-Ray wihtout doing a similar push for digital, going again to the former example for Netflix, where you can rent DVDs, Blu-Ray discs and stream the film or download it to a DVR. I hadn't originally thought of it this way, but digital media can be thought of as a disruptive technology. A lot of people will end up holding the bag (DVD stores being paramount among them) as a new technology that doesn't fit in their model takes over.

Technical issues: DVD/Blu-ray player won't read disks? Disks scratched? Player won't eject? Granted internet service is can be pretty spotty, but the above things are just as likely to happen as HDD dying. As for the 360 dying--this was never meant to be a "XBox live movie downloads will work better than Blu-Ray" argument. Everything MS does turns to buggy-ness. More just a look at Blu-Ray vs. digital media in the abstract.

As for issues of ease of download and size worries, you can look to the old canard of technological advancement increasing exponentially every 18 months (I forget who said it first). This time 10 years ago a 800MB harddrive was more than enough. This time 5 years ago 15GB for anyone not editing digital video was absurdly huge for a HDD. Right now you can buy a 1.5TB HDD for $500, or a 60GB iPod for $400. In three or four years time that'll most likely increase to a 50TB HDD for a similar price. Storage for downloaded movies, which even at Blu-Ray quality is most likely below 25GB (since room needs to be taken up by special features) will not be an issue. I could do the same type of comparison with bandwidth (I remember being so excited when we bought our 28.8Kbps modem. Now Prodigy and AOL will be super fast!).

And the switch from standard def to high def is not one driven by secondary markets like video games or movies (if anything, the switch is driving those markets to change, not the other way around). It's one driven by the primary use of television sets--the viewing of television. Many shows are broadcast in HD, eventually all will be, hence the switch. But the switch from standard broadcast quality to HD broadcast quality is an enormously bigger quality jump than the switch from DVD to Blu-Ray or even digital media to Blu-Ray. That's why HDTVs exist--so people can watch football games and Lost in the highest quality possible. Blu-Ray is an ancillary matter. (The swtich is really to unify broadcast formats globally, but that's another matter entirely).



My consoles and the fates they suffered:

Atari 7800 (Sold), Intellivision (Thrown out), Gameboy (Lost), Super Nintendo (Stolen), Super Nintendo (2nd copy) (Thrown out by mother), Nintendo 64 (Still own), Super Nintendo (3rd copy) (Still own), Wii (Sold)

A more detailed history appears on my profile.