Sorry to disagree. Yes, 80% of consumers currently own standard def TVs, but these will soon start to phase out from the market. By soon I mean the next couple of years, probably even as soon as mid 2009. True that consumers won't rush out and buy an HDTV right away, but prices on these are dropping considerably. A lot of people don't realize that there are HDTVs that are not LCD or Plasma. There are plenty of CRT (Tube) HDTVs that are very very close to Standar Def prices.
As to the downloadable media. I don't want to watch movies on my PC, and I don't want to connect my PC to my livingroom. My PC stays in my office (In this case my room). I want to sit on my couch and relax when watching a movie, not sit for over an hour and stare at my 17" computer monitor. Until the industry releases a multi media PC that costs less than a Blu-Ray player that will connect to my HDTV and not be a wasted resource, there's no point. Downloadable movies are great for when you are on the go, or if that's your beef, good for you. But most people out there wouldn't enjoy a downloaded movie unless they have their PC already connected to their livingroom TV, and I know how anoying it is to disconect your PC to reconect it out in the living room just to watch a movie. Given up on that a long time ago.
DVD will eventualy go as VHS has. Some people were upset and some even refused to buy a DVD player when these were first introduce. I remeber when my cousin worked at Blockbuster, people would complaint because VHS was being phased out and they still refused to buy a DVD player. The funny thing is that this was at a time when you could start finding DVD players for under 50 bucks. That was not being smart, it was just being stuborn.
As to the fear that it will get to the point where Blu-Ray players won't play your older media just won't happen. Sony can't afford to alienate the consumer market in that manner. Backwards compatibility is the key to success here, and DRM won't prevent you from playing older Blu-Ray movies in newer machines. I will not be surprised if early next year Sony releases a Blu-Ray / HD DVD player combo to gain the market on all the current HD DVD owners that are holding a grudge. And if they make it affordable, that might just increase their revenue allowing for newer players to be released for a lot less.
Blu-Ray will eventualy phase Standard DVDs out just like DVD did to VHS. And until PC manufaturers release a set top box that only allows download for movies from Netflix and maybe even soon Blockbuster, consumers will continue to move forward in picture quality. Just remeber, Apple TV has not been a success as of yet. It has premise, but it's been around long enough to where it should of taken off by leaps and bounds. Consumers are just not that interested on buying something like that when they can just buy a Mac Mini for a little bit more.