On HD optical, price for content and players needs to keep dropping to within shouting distance of DVD or the market in my opinion, will not go much past 20% of DVD. We know consumer apathy toward higher “quality” is very high and this is something that simply cannot be fixed. So we have to provide value proportional to it which we know is not at 10X the player cost and 2X the media cost.
Digital distribution is even worse off today. Consumers at large don’t have ready access to it as they do with optical players. Nor do they do understand its value proposition. Actually, I don’t know that the value proposition is really there yet as no one has made any money from it.
To put some scale on this, if HD optical has 2 problems, digital has 20. However, and this is important, if digital solves these problems one day, its value proposition by definition is superior to making plastic discs, shipping them to stores, and have you buy them after some delay. So when the time comes, the shift will be dramatic and highly disruptive to optical business.
In balance, if you pushed me, I would say given the state of technology, infrastructure, drive from companies to make one or the other successful, that HD optical is ahead. But I reserve the right to change my opinion on a 12 month basis.