I think both formats will survive for quite a while. Each format has their strengths and weaknesses.
On Demand works well with new releases. You just want to see the movie. You’re home and want something to watch. Push the On Demand button and there it is. For many films, you probably wouldn’t benefit from the extras on the DVD. No advance planning and far less expensive than buying a DVD. Similar to buying a song from I tunes.
DVD works well with movies you’re going to want to see more than once. It also has the advantage of including all the extras. For some movies, the extras and commentary are a draw. Also, the packaging can be helpful. With a tv series, the booklet can have details of all the episodes.
I’d say buying a DVD is similar to buying a CD of an opera or a boxed set. Sure, you want the music. But you also want the lyrics and other notes which come with the purchase.
FWIW, my VOD offers bonus features with some of its TV and movie selections. I don’t really use the VOD for buying films (maybe two or three in 8 years) but the TV bonus stuff is the typical “making of” featurettes that wind up on the DVDs and the TV bonus stuff is free.
I also agree that there is a market for both “hard” and “soft” copies of movies. Some people just like to hold the physical item in their hand, and there are the special edition extras that always sell units (free shirts, decorative boxes, etc.).
I will go a step further and posit that there will be interactive VOD in a few years (or sooner). You will be able to access all of the extra content from a special edition DVD in a downloadable format.
I think the hurdles are things like rights management and copy protection, but I believe those will be resolved eventually.
That being said, I have no desire to upgrade to Blu-Ray. I hope that digital delivery comes sooner rather than later.
I gave up on “extra content” when I stopped buying vinyl LPs. Lovingly holding and gazing at the album cover is something I gave up by the time I was 18 or 19. I can count on two or three fingers the DVDs which had extras I had any interest in.
I do like having a copy I can keep and view and re-view anytime I want, but just as it was with CDs, I quickly got lazy and wanted it all on my hard drive. Walking over to the CD shelf and manually putting a CD in was suuuuch a chore!
I’m one of those people who likes having physical copies (and I’m still quite young, so I really have no excuse for being old-fashioned). VOD might be good for renting, but if I’m buying something I like being able to physically pick it up and such. It’s also somewhat difficult to lend a file to a friend for a weekend, while my DVDs I can just hand over. There isn’t really a good alternative to DVDs if you want portable to be able to take a video from place to place. (although we’re getting closer all the time).
