Broadband is taking so long to get to a decent speed.  I get a 1MB virtual guaranteed speed at home in Scotland and we only can get a 1MB dedicated line at work in Glasgow.  This has been the case for near 2 years now and I would be surprised, actually shocked if it were to bump up to even 10Mb within the next few years.

The BBC iPlayer is one of a kind and the best thing since sliced bread IMHO, but the quality isn't perfect, but you are right about TV quality video being streamed virtually instantaniously.  but it's only 480p remember and it would probably take a 50Mb line to stream 1080p (don't know the workings).  Then we have the 5.1 or even 7.1 sound, which would take even more.

Add to the fact that people still like to own something physical for movies, so IMHO Blu-Ray will be around and strong for the next 3-4 years anyway.

Also, don't forget the buzz word of the late nineties.....HDTV....how long has this taken to come to fruition and it's still a good 3-4 years away before becoming properly implemented.

Digitial Distribution is IMHO a pipedream and will only be used by those you basically like the idea rather than the general masses who want to walk into a store and buy a product and come home to watch it.

DD is here but its up to the ISPs (and media distrubutors) in the end that will make it acceptable trade off. As for Rentals, DD will do well just as PayPerView has always have done well. The actual purchasing of movies you want to keep will always be a barrier do to bandwidth caps, DMR and storage devices. Don't forget, just most of us can afford internet and stuff, in NA 50% of the country makes less than $50k a year and can't afford cable or $30-$50 broadband service to get such media. Thats where Walmart and brick and motar will always have a place in this country.

http://www.sci-tech-today.com/news/Bringing-Broadband-to-the-Poor/story.xhtml?story_id=011001CEHDPQ

You can't really count Netflix as a true direct download service. Most people who buy it look at the streaming as just an extra on top of the fact that you get to rent DVD's. Netflix has reported that the streaming service as a whole is hurting them financially, as it isn't profitable yet.

When true direct download services that offer nothing except downloadable content start taking off, then direct download will have a foothold in the market.

As this was posted to show bad news for Sony I will go at it from that angle.

To start, Blu-ray has a large future ahead of it. There are millions of households in the USA that do not have anywhere close to the speed to download, let alone stream on demand content. In the world as a whole the situation is even a bigger issue. It will of course become less of an issue over time, but no were near as fast as Blu-ray adaption is going to take place.

Now on to why this does very little to effect Sony. Sony has seen the digital future and have already got the ball rolling on being part of it. Many people questioned the idea of a Video Store on PS3 because they thought it was all about Blu-ray. Well the truth is PS3, Sony BR players, Sony TV's, and Sony computers are being built around the idea of both Blu-ray and DD. Last year at CES Sir Howard Stringer layed out the road map to Sony's DD plan for the future, and it started last year with the PS3, and it is supposed to be part of every Sony device by 2010.

Sony dropped the ball big time on musics trasition to DD, and they are making sure they are at least in the running with DD of movies. As they get more devices connected, and more content on their network things will continue to get better for them. The more content they are able to sell the more we should start to see DRM on the content bought over the net, and that is really the best future possible.

So with the Sony stuff out of the way I want to mmove back towards why Blu-ray is going to do amazingly, and why it will reach close to the levels of DVD. The movie industry just likee Sony has seen that the future of the media is not either physical or digital. It is a hybrid of both formats that is going to keep the buisness running nicly fo the next 10 years or so. That is why every Blu-ray player is going to be a hybrid player that can play BRD, or do on demand, or DD. As the prices of Blu-ray players fall to the $50 dollar range DVD players will be pushed out of stores, and consumers will have no option but to by a system that is capable of Blu-ray playback. As the market grows, the prices of Blu-ray will fall in line with DVD, and consumers will start buying the better quality versio, because it will be priced the same.

This. Although I do believe DD will do well, I don't think it will do much harm to Blu-Ray.

The best case scenario for Blu-Ray is that DD takes up like 10-15% of the market. Which means Blu-Ray still wouldn't be as pervasive as DVD in its heyday.

The maximum likelihood scenario to me is one where DD serves about half of the consumers and disk-based media the rest. I for one will probably own a blu-ray player at some point (when they're cheaper than $100), but will want the convenience of DD the majority of the time.