I think Flash Memory HD movies will be a hard sell to the casual consumer, unless it's packaged like a UMD with the Flash USB memory stick held in the middle. So that stores can sell it like packaged media.

I like the idea. I think what it ensures is a non-finite storage space. Flash Memory sticks will go up in capacity. And they really costs almost nothing. Even a $20 8gb stick, they're making a killing on. They've already got a 16gb stick for $30 that they can put 720p movies if they wanted to.

Note: I'm a blu-ray fan. The Toshiba stick is pure coincidence.

I think something like this would definately put a dent on Blu-ray if they were to exceed the capacity of Blu-ray within a year. However, I don't see how they can make it read only. Studios would not be so willing to abandon the disc format and the DRM capabilities of Blu-ray. Millions were spent to ensure that.