unfortunately for Sony, that's not the end of the format war. the bigger war is with downloads; both legitimate and illegal...
to be fair MS has also lost a considerable amount, plus this is the first time Sony has sold a console at a loss (Nintendo still hasn't done this yet).
I think it's going to be ~15 years before video downloads take over 50% of the DVD/Blue Ray market in the US so they have plenty of time to milk Blue Ray.
Dual Layer Blu-ray capacity: 50 Gigabytes.
Verizon FIOS - 20 Mb/s for $70/month, or 50 Mb/s for around $144/month.
So, how long would it take for a person on FIOS to d/l this?
@ 20Mb/s: 50000MB / (20 Mb/s / 8 bits/Byte) = 50000MB/2.5 MB/s = 20000 seconds. Which is ~333.3 minutes, or about 5.5 hours.
@ 50Mb/s, you have (20Mb/s / 50 Mb/s) * 5.5 hours = ~2.2 hours.
Yes, you're not going to get full speed, but even a factor of 2 slowdown is faster than waiting for netflix.
So, it seems that the network required to do this is already being rolled out. For example, Verizon market penetration is outlined in a recent press release [1], indicating that Verizon will offer these speeds to 10 million subscribers within the next week or so.
As you said, it may be ~15 years, but I think it will be a lot shorter - I'd guess 5-7 years. I can't imagine that comcast is sitting around while verizon makes inroads into their userbase. They will counter, driving prices down and increasing market penetration for these high speeds.
Fios might hit 20% penetration across the US in five years but it's only going to slow down after that. Today it's only in 16 states and Although the network already reaches 10 million homes and business, it will reach more than 18 million by 2010. so it's growth in availability is good but not all that extreme. And a lot of people who could use the service don't. Personally I would go with FIOS but I am dumping my 20Mb Comcast connection for 3Mb DSL because they keep messing with my line.
PS: Once they started to send RST packets on non BT traffic I decided to jump ship so that BR movie is going to be 37hours for me.
EDIT: I only point this out because if your business model assumes most people will have 20MBit connections in 5-10 years you’re going to be sadly mistaken.
Some telcos seem quite intent on charging more for bandwidth than the cost of a film in a bargain bin. If telcos continue to strangle bandwidth then physical media will remain viable for a longer period.
http://en.wikipedia.org/wiki/Playstation_3_cluster