http://www.ps3fanboy.com/2008/03/14/microsoft-predicts-blu-ray-irrelevance-in-12-18-months/

This is ludicrous talking head speak for the vast overwhelming majority of the movie-watching population.  If I can get better than 1.5mb/s DSL in the next 18 months I'll be shocked, let alone enough pipe to handle True HD video.  At this stage of the market, digital downloads and packaged optical media are NOT different versions of the same product, as these people seem to believe.  They are utterly different products.  38mb/s MPEG4 with 5 mb/s LPCM is not "the same" as the puny bitrates we get through video on demand at this time, and the average consumer can handle having a shelf full of optical discs much easier than they can prepare for terrabytes of digital storage medium.  How many average users have a backup strategy?  The first time you want to watch The Matrix but that hard drive died and you have to redownload you'll be mad.  When you realize the DRM might make re-downloading insanely painful or impossible (as Casey has shown) you'll be wishing you had a Blu-Ray player instead.

The market will figure this out, but not in 12 months, sorry Mr Pundit.

{Edit: I ironically realized after I posted that the words of someone linking to any website with "fanboy" in the name are probably deserving of a side of salt as well.  Oh well, it's the internet...}