I read this article on EngadgetHD (Link) regarding the decline in sales of SD DVD players. While this is no great shock to anyone, it does underscore why this battle between HDM and potential others is of great importance to the studios. While the early results are not spectacular, they are growing and people are getting the message that there is something better out there than DVD. The HDM format war has certainly hurt the adoption of the new standard and left the door open for Video On-Demand or another download service to take a big chunk of that pie. As broadband adoption rates and speeds increase, and they will with fiber adoption, then HDM has a strong opponent in VOD. VOD, in theory, can be cheaper, save trips to the store, avoids issues in finding a movie, and provide excellent image/audio quality relative to SD DVD. Studios may prefer it as DRM may be easier to implement on a VOD system as it's online nature would allow studios to constantly check the device for hacks. Xbox 360s Video Marketplace has yet to be cracked even though both HDM formats have in a shorter amount of time on market. The advent of Comcast's excellent On Demand service, Tivo, and other DVR services have taught people how to use VOD systems. The only thing holding it back are bandwidth issue and high prices for content. If VOD could add a Netflix type model ($17-$25/month for unlimited movies and TV shows, HD or SD) then I would scrap HDM in a second and switch strictly to on demand. A set top box for a VOD service could become VERY cheap. As hard drive sizes increase and processor prices go down, a powerful VOD box could be very affordable for all consumers right at launch.
HDM still has a lot of advantages over VOD, mainly that people like the physical disk and enjoy collecting. That built - in tendency of humans to collect things would disappear as VOD wouldn't provide us with a physical item to collect. The bandwidth issues are also big right now as it is almost impossible to beat the bandwidth available in the back of a Walmart truck.
the large disk capacity also provides tons of space for Higher Quality video, Audio, and special features that would have to be trimmed for a VOD version of the movie. Prices on current HDM is very high but if they can be reduced to SD DVD levels, then VOD will have a VERY hard time taking this market.
The third wild card is future technologies. We have no idea what the heck is coming down the line that can replace what we have. In 10 years we could find it ridiculous to purchase optical disc media or download over the internet. Personally, I'm rooting for a Holodeck.
Don't laugh, while the visualization techology is still in sci-fi land, the concept is certainly a stage in the progression of our media. Video Games are a necessary step toward that technology as they force writers to write a story built for interactivity instead of just viewing. If I live to be 100, I may see a basic holodeck in my life. 
Don't get me wrong, DVD will be with us for a long, long time as I doubt many people will replace their back catalog with HDM discs, but I think there is a strong possibility that one day, far down the road, a day and date new release will sell more copies on a HDM format than an SD DVD format.
HDM still has a lot of advantages over VOD, mainly that people like the physical disk and enjoy collecting. That built - in tendency of humans to collect things would disappear as VOD wouldn't provide us with a physical item to collect. The bandwidth issues are also big right now as it is almost impossible to beat the bandwidth available in the back of a Walmart truck.
the large disk capacity also provides tons of space for Higher Quality video, Audio, and special features that would have to be trimmed for a VOD version of the movie. Prices on current HDM is very high but if they can be reduced to SD DVD levels, then VOD will have a VERY hard time taking this market.The third wild card is future technologies. We have no idea what the heck is coming down the line that can replace what we have. In 10 years we could find it ridiculous to purchase optical disc media or download over the internet. Personally, I'm rooting for a Holodeck.
Don't laugh, while the visualization techology is still in sci-fi land, the concept is certainly a stage in the progression of our media. Video Games are a necessary step toward that technology as they force writers to write a story built for interactivity instead of just viewing. If I live to be 100, I may see a basic holodeck in my life. 
Don't get me wrong, DVD will be with us for a long, long time as I doubt many people will replace their back catalog with HDM discs, but I think there is a strong possibility that one day, far down the road, a day and date new release will sell more copies on a HDM format than an SD DVD format.












