[Bozster (Unverified) Posted Feb 2nd 2009 2:21AM]

Okay.. even though I'm a big cheerer of digital downloads just on account of convenience and a few other things but in general I'm no Blu-ray hater either, I have to agree with the notion that digital downloads won't replace optical media any time soon as well. The future we are looking at will be mixed. DVD will remain the king for a long time, in the mean time Blu-Ray will hold the top end of HD market with minor marketshare for at least next couple of years, but we will see a sharp rise among online services and digital downloads as well, so those who can will take full advantage of streaming and download services while those who can't will remain with the DVD and Blu-ray. The interesting player in the market is the initiative for memory cards. The big players are already joining up and it will be another stream of content (probably SD first, then later HD).

The real question here would be whether or not digital downloads will dominate Blu-ray's market share and I would have to say most likely yes. Even though digital downloads won't be able to take on DVD, just like we have CDs today still, digital downloads will eventually outpace the Blu-ray marketshare IMO. With the adoption rate in the article and best case estimates by 2010, Blu-ray's market share will be 11%. This tells me that there's a lot of room for digital downloads to grow and take over.

The revenue by itself is not a measurement of success. I disagree with some analysts commenting that costs of streaming are rising. The fact is that companies behind Blu-ray, mainly Sony as one of the key players have lost a lot of money to push the standard. First with format war against HD DVD, then on hardware production and replication costs and so on. Sony alone probably lost billions in marketing dollars and PS3 decline and one of the reasons could be attributed to Blu-ray. In comparison, digital downloads 11 million quoted by someone in the article that Netflix invested is really just a drop in the sea.

I don't see how digital downloads will increase costs, sure they are losing some money in the beginning but with more and more users joining up, it's obvious that number of subscribers to the service will outweigh server costs generating positive revenue much faster then Blu-ray did or will. As I mentioned above, revenue by itself when compared to Blu-ray is irrelevant simply because most people pay fixed subscription to Netflix or utilize rentals that cost much less then sales of optical media that carries other replication and packaging costs. As some analysts mentioned in the article state, the Blu-ray PR numbers shown in revenue are obviously misleading because you can't look at the individual unit revenue as growth. Unlike Blu-ray, digital download services have capability to reach much bigger number of homes in shorter time then Blu-ray ever will.

Bottom line is, I can definitely see digital downloads expanding much much faster then Blu-ray because you will either only need an extenders already present in consoles, computers and so on then buying new players and discs.