I agree that physical media still has a place for right now; I am talking more about the future.  Look at CD sales for a probable vision to the future of DVDs/BRs; they still sell, but there is no more growth.  All the growth is in other areas.  If you were to look at Blu-Ray purchasers, I am going to pull a number out of my ass and say that 90% of them probably bought DVDs as well.  In that sense, Blu-Ray is just cannibalizing an existing purchaser base. 

VoD lowers the barrier to entry for people to watch it (by in some cases being free with ads, in other cases being an add-on to a subscription people already had, etc).  Because of thise, it can expand to reach new people and provide growth in the market, because you don't have to spend $30 on the DVDs to see if Friday Night Lights is worth watching (hint: it is, and I've purchased in on physical media).  However, because with VOD you can expand to new customers, the overall growth of the market is greater.

As time goes on, physical media will get more and more outdated until the point where it is seen more as a nuisance than anything else; for many people, CDs are reaching that point (or have already passed it).

Granted, the movie/TV companies will like this no more than the record companies like the transition; DVDs and Blu-Ray are high margin, low volume; a show like Friday Night Lights, or Firefly, or any number of underappreciated shows can have respectable DVD sales because of a devoted audience, even if they do not pull in the huge ratings.

VoD, on the other hand, is high-volume low-margin (i.e, ad-supported or subscription supported for the most part).  VoD, will never be as profitable per copy as DVD/BR.  It balances that out by making it available to be appreciated by a huge audience.

It will be a long, slow process; but I would be more comforable with having my money invested in companies going the digital distribution route than the physical media route at this point.  If you disagree, you're welcome to invest your money elsewhere.  I just think mine would be the safer one ;-P.

Well with Blu-ray music might get a second round in the HD music players again. Thats right music on Blu-ray in stunning quality.

http://www.highdefdigest.com/news/show/Surround_Records/Music_on_High-Def/Disc_Announcements/Tchaikovskys_Piano_Concertos_Audio_Blu-ray_Announced/1839

well sony did lose alot of money,it will be smart for them to start making rofit and then using that money to make big games,and making even more money and repeat

Lol?

I;m serious, I loved the idea of super-audio CDs back in the day. They offered a much cleaner sound then CDs. If they were Blu-Music Discs the audio quality would be amazing. 7.1 Uncompressed audio = awesome!

MS try to make their books look good by hiding the 360 repair costs in some other division.

The total for that will be well over 1 Billion USD by now.  They are still failing...

The problem is... you're about the only one.

If people cared about sound quality we wouldn't have CD's or Cassette tapes. Everyone would still be spinning the Vinyl.

Which is generally the problem. Your looking at this stuff from a tech enthusiasts point of view. Not from the view of the market as a whole.

I mean... why didn't Laserdisc catch on? It was better in every way.  Why did VHS beat out Betamax when Beta was the better format?

These are the kind of things the tech enthusists miss.

I sit between 3-9 feet away from a 53" 1080p Sony bravia LCD tv. I see a difference, I just don't care for the difference enough to justify buying a $400 player and more expensive disks. The cost/benifit is simply not there, especially when I can't play those disks in my car or on my other Dvd player... I can't lend them to friends because they don't have blu ray etc. It just isn't worth it.

I have the TV, I have the player but I don't care for the disks or the content improvement.

I sat

Yeah, and you need a $2000+ Stereo system to really apreciate it! Furthermore, what percentage of the population notices and then what percentage of the people who notice really care about the quality difference?

I don't think turning up a profit will be as hard as it seems.
The PS3 installed base is starting to be big enough for software sales to start counterbalancing hardware sales.

One example :
April 2007 : 372k PS3 sold, 636k PS3 software sold ( incomplete numbers but what VGChartz has). 1.7 software units sold per console.

April 2008 : 682k PS3 sold, 4.1 millions PS3 software units sold( VGCChartz numbers again). 6 units of software sold per PS3.

Keep in mind this is April the month in the quarter without big titles.

May and June will be more like 7 or 8 software units/console with GTA4 and MGS4...

And as time pass this ratio will become bigger and bigger.( I woudn't be surprised if we get to something like 10-12 in 6 months for the holyday period).

Sure PS2 software are slowing down to counterbalance the rise in PS3 software but I can't believe Sony is still making that much per sale of PS2 software these days seeing how most games are priced at 30$ or less NEW....

This rise in PS3 software sales ( which will keep happening as the installed base increase ) will be the key factor in PS3 turning a profit and will be what will enable more price cuts ( I still think we will have at least a 50$ cut around the holydays).

PS : this is the same thing that made the 360 turn a profit last year, once you have over 10-12 millions console out the monthly ratio of software/console sold increases a lot and software start covering for hardware loss...