Statistically people like "stuff". What "stuff" well there is physical ownership to having a collection of things. "Hey did you see my neighbor's collection of movies, wow I've got to borrow some of those!"
Somebody mentioned Target ... let me see if target has anything I can download movies to ... okay they have Apple TV, again as much as we love Apple, they just don't have the penetration or name recognition that Sony does in the household. So, I don't see them being the leaders in digital distribution. Maybe our cable providers ... well I can download something for 24hrs, but then its gone and I have to download it again. My set top box does feature HD-DVR, but that just records what's on TV and I can't get the latest movie releases on TV. Oh wait, I have an Xbox 360 ... nope can't keep them movies either. There isn't any real ownership with digital distribution. Sure you can buy movies using Apple TV, but who knows how that works? Consumers don't. They don't see any store displays saying "Download all your favorite movies today!", "Coming this Tuesday for digital distribution ... Transformers!" Not gonna happen. Retailers have way more influence in our world than many realize. If digital distribution does get popular then they will lose tons of money on disc movie/game sales and in turn will refuse to sell the systems that offer that option. Its very sensitive territory. Retailers don't make money on the players/systems, they make money on the movies/games.
When Warhawk PS3 came out it put its pinky toe in the water to see how cold it was. It was pretty cold, retailers knew what Sony was doing and said that they had better have some copies of that game for their store shelves or they would stop selling PS3's. On top of that they demanded that the down loadable one not be available at a discounted price. Sony got around that by packing in a blue-tooth headset. At the time PS3's weren't selling that good anyway, but they definitely couldn't afford to take any more losses.
I have an external hard drive connected to my PC with over 300gigs of Anime on it. I love it, its all there nicely organized. I can access it with the flick of a switch. I just don't know if I can see that technology in living rooms anytime soon though. It's not easy enough to get access to the content.
As for quality, downloaded movie content, the kind you get with Apple TV, Cable Company or your 360's, its all at DVD standard quality. It looks decent and downloads in a decent amount of time. But those tangible store shelf available blu-ray discs, they look amazing and don't require any internet downloading at all. It has literally 10x a better picture. Pop in a dvd it will probably playback at 4.5Mbps. Pop in a Blu-ray and it will probably playback at 45Mbps. That's a super leap in streaming data for superior visual and audio quality.
... LOL, so much for a quick reply
