If we want to talk about illegal downloads, what's the effort of hitting piratebay.org, downloading a torrent and firing up a BitTorrent client? Certainly MUCH less than the effort of driving/walking to the local DVD store and back.

As for cost, let's say downloading a movie takes 10 hours (usually it would be less). For most PCs, if you leave them on with the monitor off (as you should if you're not looking at it for 10 hours), you'll pay for certainly less than 1.5 KWh of electricity during that time. How much does a KWh cost in your region? Where I live, it costs about 0.1 €. Does your movie renting place charge anywhere near that for renting you a movie?

As for ISP costs, most people who download movies would like to have a fast connection even if they didn't download them, so I fail to see where you're getting at. Storage costs are nearly irrelevant too, as you can easily recycle storage (deleting a movie before downloading the next one).

I really don't see where you're getting at with this misinformation. Do you own a movie renting store by any chance? ;)

The average person won't go out and purchase an HD disc medium on it's own. They will purchase a PS3 though so the impact on sales will be there but it will never replace the DVD outright.