HD movies are way too big and hard drives at this point are way too small for me to ever want to get into HD downloading.

Not to mention bandwidth is still hella limited.

You do realize that a modern 1.5 Terabyte hard-drive can hold 375 720p movies (and 180+ 1080p movies) and with a dedicated 1.5Mb/s connection a 720p movie can be downloaded in under 8 hours ... Currently the technology exists (and is available in Korea) that offers over 500 times that internet speed. On top of that, consider that Barack Obama has recently announced an initiative to build the broadband infastructure which could (easily) result in a dramatic increase in the speed and availability of broadband internet in the united states over the next 5 years.

Who in the heck still has a sub 2 Meg Connection in this day and age in the modern world ?

My current set up in the UK runs at 8 Mbs and I can download HD movie in approx 1 and a half hours.

I am not a-typical.

My mates got the a 16 Mbs connection through Virgin media.

Part of the reason why I used 1.5 Mb/s is that it is readily available and inexpensive for most people ...

The average in the UK is around 4-5mb, so when there are alot of these 16-20mb lines being used, it also means that there are a huge amount of people using sub 4-5mb lines.

And the companies that want to sell media will want to be sure that the people at the lower end of the spectrum can watch the movies in good time, which, for the general public would have to be within a minute or two of selecting the film.

So for HD quality, the lowest end of the broadband market will need to be significantly faster in order to make this possible.

Without mentioning the ever so tiny issue that people want to watch movies on their TV's, 99.9% of computers are not connected to a TV for both logistical reasons and the lack of technical know how.

My parents have a media centre in their livingroom, but only because i suggested, built and set it up for them, they wouldnt know where to start otherwise and certainly wouldnt have thought about connecting a computer to the tv in the first place.

stand alone players work because your average consumer is comfortable with buying one in the knowledge that:

1) they can connect it to their tv
2) they can control it through their tv
3) and when they are finished watching a film they put it back in the box and turn the player off, no crashes, no reboots, no upgrades, no maintainance.

If you want to see the likely direction of the companies selling the media, you need look no further than what the average consumer can handle, downloads may take over one day, but your talking around 10 years from now more than likely, more than enough time for blueray to be profitable.

I'm pretty sure most HD download services are 720p and legacy sound. You are lucky to get 5.1 Dolby. I think my philosophy is if you are going to do HD, go all the way. I want 1080p and I want HD Audio codecs and I want the highest bitrate possible. Sorry, but only Blu-ray can do that guaranteed, at present. And the fact is it will be probably 5 years (2 years if we are really really optimistic) before streaming/download "might" do that. And then on top of that it is inherently a more complex system because people basically want to just put in a disc and press "play". Unlike us, the average person is not a geek :). They don't want to network (which in most cases is what you will end up doing with a 360 unless the HD space is increased dramatically), and the market has shown a slow uptake with PVR's. People want as simple an appliance as possible to watch a movie. I don't think that has change. It will, but it will take more time.

In other words, I think Blu-ray came out early enough, before streaming/downloading was mature enough to be a real threat. I might be wrong.