This article on Engadget HD today greatly amused me.

Research finds that people still heart physical discs, greatly prefer Blu-ray to streaming

While the "HD streaming rulez!one11!1!" bandwagon was quickly filling up after Netflix announced that it would be bringing such a service to the Xbox 360, the numbers just don't substantiate the claims that physical discs are doomed anytime soon. Sure, for the budding technophile, streaming is just the next great thing, but for the average joe / jane, the tried and true disc still holds a great deal of importance. A recent study by market research firm SmithGeiger found that out of over 2,000 surveyed, "HDTV owners familiar with Blu-ray favor the format over downloading and streaming by a margin of nearly 10-to-1, with about 70% of respondents citing the fact that there's a physical disc to keep as a key factor in their decision to buy Blu-ray." It also found that 96% of BD users were "familiar with downloading and streaming services, but that two-thirds believe watching a movie on Blu-ray is a better overall entertainment experience." Sure, BD has its flaws, but not having to re-rent an HD film after a remarkably short 24-hour window sure is nice, huh?

No kidding.  The cries that physical media was dead reached their highest volume as it became clear that Blu-Ray was going to win over HD-DVD.  The people making these claims were either:

1. Analysts who must not watch many movies at home (ergo are relatively clueless on these dynamics)
2. HD-DVD supporters/fanboys trying a little et tu coque to ease the pain of their loss by saying BD's days were numbered as well.
3. HD-DVD supporters with huge vested interests in media streaming
4. Random outfits not necessarily associated with HD-DVD, but with huge vested interests in media streaming

Media streaming has such a long way to go it's not even funny.  I am certain that we'll get there, but consider the following facts and anecdotes:

1. I have yet to see a streaming solution that offers basic DVD features: chapter selection, audio selection, special features, multiple audio streams, multiple subtitle options.  This takes bandwidth and increases technical complexity of this delivery mechanism.
2. Ditto #1 but for the advanced interactive features of Blu-Ray: online features, PiP, advanced programmability, etc.
3. Quality.  Last time I checked HD Cable bitrates top out at around 9mb/s for audio plus video.  Right now this is overwhelmingly Dolby Digital and MPEG-2, with some outfits moving to MPEG-4 for better video compression.  While not bad compared to normal TV, this is a far cry from the 40+ mb/s I have on numerous Blu-Ray discs or even the relatively lean 18+ mb/s on say the King Kong HD-DVD encode.  Some people will not be able to tell the difference, and some won't care, but a lot of people do.  If you have a sound system you care.  The larger the TV you have, the more you'll be able to notice the flaws.
4. Delivery.  While some people have the option of 10mb/s U-Verse, 18mb/s cable, or 150mb/s fiber in their home, that is still a relatively small # of people and not increasing very fast.  A lot more folks are still slumming it with 3mb/s or 5mb/s cable because they either can't get or won't pay for the faster options.  Where I live, 1.5mb/s DSL is my best option.  I could literally get a Blu-Ray from Amazon.com with 2-day shipping before I could download even half of a high quality movie.

The convenience of just instantly grabbing a movie over the PSN or Netflix, or even queuing it up while I make dinner has appeal.  I will not, however, pay money to watch something of less than DVD quality in my home theater on my 106" screen.  Those of you who will, enjoy your mediocre entertainment!