Reply #8: It's an interesting sticking point since it may not even happen.

[Xithras]

PriceWaterhouseCooper and Forester Research have already said that the market has peaked. iTunes isn't seeing the video sales they expected (their best selling movie title has only moved a paltry 5,000 copies), Netflix's online streaming service isn't heavily used, and the Walmart project closed up shop (important since WalMart is the largest movie retailer in the country). The problem, it turns out, is part technical and part DRM. The studios will not allow any streaming services that download the movie onto a viewers hard drive, because those can be copied and ripped. That leaves real-time streaming as the only option. The problem is that very, very, VERY few people have a connection fast enough to download a full-screen DVD quality movie in real time, and no home users have one fast enough for HD video. The telecom and cable companies are still trying to recoup their investments from the LAST broadband rollout, so there aren't even any new technologies coming any time soon capable of addressing this.

I have Netflix and have only wasted my time on their downloadable movie service ONCE. The picture quality was worse than SDTV, and the audio sounded terrible once I kicked on the surround sound and could really listen to it. The technology just isn't anywhere ready for prime time. I ended up ordering the movie the old fashioned way, and watched a much higher quality version when the DVD came in a couple days later.

I think both sides of this debate are going to end up looking pretty stupid if they drag this out and the market never materializes in any substantial way.