Well, Toshiba officially announced that it is putting the HD-DVD format to rest. This is no surprise, pretty much everyone saw it coming, even as Toshiba continued to claim that they were committed to the format.
Some people are saying, however, that Blu-ray still has stiff competition from HD downloads, like Apple TV and cable on demand services. I don’t really think this is the case.
For one thing, the quality of Blu-ray is superior to the HD download services. This may change in the future, as bandwidth increases allow for continued higher quality, but comparable quality downloads are still a ways away.
Second, and more importantly, some people like to actually own movies. For most people, this could be just favorites that you like to watch again and again*. Some people are movie buffs (I know a few) who have large collections of films. You also have TV series sets that are immensely popular.
That’s not even considering the lure of "extras", which is a huge added value to some people. With the higher capacity of Blu-ray, expect to see the extra features expanded on in the near future.
I don’t really think the market for physical media is going anywhere soon. On demand and download services have their place (we use our on demand all of the time), and will definitely replace physical movie rentals – both "brick and mortar" (like Blockbuster) and on-line (Netflix), but they’re not going to replace physical media any time soon.
The biggest hurdle for Blu-ray right now is more affordable players and media. But, like any new technology, that’s just a matter of time. Anyone remember how expensive DVD players and DVD movies were when they first cam to market? It didn’t take long for them to become affordable to the average person. Same thing with HDTVs – look how fast the prices for HDTVs came down.
* I have the original Star Wars trilogy on VHS, both the original versions and the late ‘90s special edition ones, and on DVD. When they come out on Blu-ray, I’ll probably eventually own those, too.