Top four reasons Blu-ray Disc will tank

3. Why buy when you can rent?

There was a time when I loved being able to grab a VHS tape or DVD out of my collection to watch a movie over and over again, because going out to the video store was a pain and got expensive over time. But that was before video-on-demand. Now, all I have to do if I want to watch my favorite movie once or twice a year is pay US$1.99, and I don't have to store to stupid thing. Sure, I still have a few dozen of my very favorite DVDs (The Treasure of the Sierra Madre, Blade Runner, Crouching Tiger, Hidden Dragon, The Lord of the Rings), but it's not like I've built up a library akin to the 200-plus VHS tapes I once owned. It's just not as appealing anymore. Even my colleague with the Blu-ray player says he doesn't buy movies. In a year, he's bought just six.

These days, I prefer the video-on-demand services I get off my set-top cable box. They're cheap and easy to use. According to Michael Cai, director of broadband and gaming issues at media research firm Park Associates in Dallas, Internet movie downloads and video-on-demand rentals will represent a US$1 billion market in two years. If you include advertising dollars, it will represent a US$7 billion market in 2010.

Also coming down the pike is the ability to buy movies from your cable provider and store them either on your set-top DVR box or store them with your cable provider just like any online storage service offers free capacity today, according to Cai.

"Cable service providers with video-on-demand services are a strong contender to Internet video downloads," he says. "If you can fairly easily rent or buy a movie through a cable box, you'd probably rather do that than ordering a movie through an Internet site."

4. Downloads.

While currently not up to speed, hardware like the Xbox 360 allows you to download movies in the background while playing games, so you won't pull your hair out as they trickle in overnight. But over time, cable provider bandwidth will increase -- and so will Internet downloads. My current fiber optic cable service offers 30Mbit./sec. downloads.

Obviously, I prefer my big television screen to an iPod or PC monitor, but I think the ability to transfer those downloads to a DVR box, Apple TV or some other hard drive will advance quickly. And, don't think Blu-ray champion Sony doesn't know that. According to a recent Wall Street Journal article, Sony CEO Howard Stringer is getting ready to challenge Apple in video-downloading services.

Though he doesn't have proof, Cai suspects that movie studios may be working at artificially slowing the advancement of movie downloads in order to maintain control of content. They learned a lesson from the music download industry after watching Apple dominate that market. Also, there's more of a profit margin in retail sales of Blu-ray Disc players and movies. For that reason alone, I'm more partial to supporting downloads once they're a viable option.