both formats fail for the simple fact that people still use VHS and casettes on the regular. I remember when I was in elementary school which was about 10 or 11 years ago my music teacher said that a new format was coming that would make VHS obsolete and in a few years. Well oh yeah I still waiting for that to happen.

DVD's will be around for another decade

I don't think we will be seeing an end to individual physical media for movies anytime soon. People psychologically want something they can hold in their hand and say, "this is the movie". Not, "here is my hard drive with 20 movies on it that I can erase and replace."

Yeah, DL content will take over Hard-disks in the far future when the majority of earth has 1g internet or higher or Futurama style internet....meanwhile, hard-disks will be there. So Blu-ray will win THIS present war.

I don't see something tangible like discs being completely replaced by downloaded media. For space purposes I could see becoming more mainstream when everybody starts having 5TB external HDD's but not taking over.

Digital downloads won't begin to take a hold of the market until download speeds break the 15 MBps barrier, allowing a 1080p HD film to be downloaded in mere hours, and HDDs reach the multiple TB level (4+) so that dozens (if not hundreds) of movies can be stored on a single device.

Of course, taht still won't be sufficient for people like me who simply prefer having a physical copy of the film? I still buy CDs, and I'll continue to buy movies for many years. I prefer a hard copy of a cd/movie because I like the case and booklet, because I can bring it wherever I want and use it on whatever player I want, and because it's always there if I needed. What if my HDD goes? There goes all my movies.

And what about all the non-tech saavy people? many of them still use dial-up, and would probably have a hard time keeping track of downloaded movies.

I think for most people 720p would be enough, for streaming purposes anyway.  According to wiki (yeah, I know... but it's an easy reference) a bitrate of 20Mbps is enough to deliver 720p @60fps using H.264 codec.  Now, I agree, that's still too high for most Internet connections, but we're not that far off.

As for the non-tech savvy - well, most of them managed very well with digital audio, and Apple made it easy and convenient for the media to be mainstream.  Why should video be any different?  I think with the right hardware and distribution systems in place, even the non-savvy will find it easy.

downloadable media is great, but what if l had a movie and I wanted to bring it over to a friends house to watch it? That's why people buy discs-- because its easier to bring a disc than it is to bring a set top box

Good post! I have a 12MBps line myself, but 99% of all people in Norway who have broadband have 2MBps or slower, some as slow as 704Kbit. Much of this stems from tele companies wanting to earn as much dough as possible while providing the least bandwidth possible to be cost efficent. Outputting 1.5-2 MBps for 30$ a month is a helluva lot better than my 12 MBps for 35$ per month for the company.

Meanwhile, those who offer online services are filling up on content and are wishing for faster lines so people will make use of their content to a greater degree. The wishes of the online supplier and the boradband supplier do not coincide yet, unfortunately.

The tech freaks in Norway are loathe to use ADSL over fiber if given the choice, which is no wonder; fiber is basically 10-20 times faster for the same price or even less, and the DSL up speed is abbhorrent at best.

Anyways, back on point; it'll be at least 10 years realistically before your average broadband user has the bandwidth to make good use of streaming HD content at acceptable speed. So optical media is here to stay, for a lot longer than a decade, I think.

"The next mass adoption media will be downloads and HD VOD"

bah lots of people are saying this but its mostly FUD. There is no really working SD (not even talking about DVD quality) download or VOD service and HD content is out of question.

We are talking about at least 15Gb for a movie. I do not have a internet connection that could handle that and I know nobody who does. Streaming would be the only solution and this doesn't work very well either especially when you want to fast-forward etc.

I would say we are quite a few years away from really workable HD download services. And even then a BluRay disc can contain 50Gb. You would need a big hard-disc to save a couple of movies. I am no movie fan and have perhaps 50 DVDs if these were HD that would be up to 2,5 Terrabyte, nice. Optical media are here to stay for a while.

In the end there are two prerequisites for HD VOD taking over.

1. It needs to be as easy and usable and reactive as DVD/BR, thats a lot of years away.
2. ALL movie companies have to make support the VOD platform (for example iTMS) without too many DRM hassles. That's even harder to achieve.

No we will have optical media for a while.

 Yes, I know. That's what I was saying all along.

 Digital music downloads have been increasing because people get more for their money paying $0.99 per song than they do paying $20 for 2-3 good songs via CD.

Movies are different because people feel that they're getting their money's worth, so there really is no reason to dump phsyical media in favor of downloads.

There are also other factors which people seem to be neglecting, such as server upkeep, which would make the cost of downloads nearly identical to DVD's/Blu-Ray. Broadband access as it stands right now is not even sufficient for that kind of downloading, especially when you get into hi-def movies that take up gigs and gigs and could easily fill a hard drive after just a few movies.