Well, in principle, Moore's Law must come to an end. There's a point where molecules are simply not stable enough to store data in any current form. If they develop quantum storage sometime soon, then great. Sure, there have been amazing discoveries every couple of years that extend Moore's Law, but the naysayers have always pointed to existing technology. now we don't point to the technology being the dead-end, but the actual laws of Physics. If Intel (or anybody else) can manage to "discover" a way around those, I guess we're golden. I don't see it happening. I'd say, best guess, we'll hit 5-10GB in a 3.5" hard drive before magnetic media can literally go no further. We'll probably someday get to 20GB or so with solid state in the same form factor, but cost will continue to be a factor as capacity grows.
DRM IS a problem. No, it hasn't affected iTunes sales because the vast majority of people download iTunes music for the iPods. it's a big reason the Zune is having such a hard time. But video is different. People want to be able to take movies with them, burn them to disc, play them on a multitude of players and take them to a buddy's house. DRM can and often does prevent such measures. Also note that in Europe, where DRM-less music is available online, the sales numbers for non-DRM music top those of DRM music per customer.
Also on the streaming media front... it's going to take stand-alone devices that are VERy easy to use and understand. Sure, even gramma has a DVR cable box these days, but unless it's as seamlessly integrated (meaning not nearly as much competition) it's going to scare away a lot of people. Shit, how many video stores still carry VHS? Lots! Why? Because enough people still rent them. That means there are a lot of people who have not even moved to DVD yet, let alone HD-format discs and definitely not online delivery.
DVD rental is easy. you want a movie? you go to the store, grab it, take it home, take it back. Online rentals? Let's say for sake of argument that the DRM protection allots you 48 to view the movie. Well, that's about on par with video rentals (though most places do at least 3 nights even for new releases these days). It has to physically download. So any slowdown of your home internet connection means you may have difficulties even getting the media to begin with. Content delivery is a tricky thing to begin with, even for everyday internet (I've worked for ISPs in the past... it can be mind-bogglingly difficult) The work that goes into keeping a Tier 1 providers connection available is a hefty amount of work. To offer full-range (video store quantity) downloadable content? it'll take a LOT of overhead. A LOT!
As for your snippet Cyn, I agree with them to a point. But as I mentioned above, capacity is useless if it's not being used. Full length feature films at 1080p with lossless audio don't take 50GB of data. They don't take 30GB either. *shrug* The capacity argument is fairly moot across the board. Blu-ray does currently have about 25 more titles than HD... but that's a ping-pong game that's been going on for how long now? About two years? By Spring, HD will have more, by summer, BD will have more. If you use those two items to rate the health of high-def discs, you'll always be confused. Look at the backers. Look at the money. look at the studios. Those three things are where the end will be. Sony, as previously mentioned, has yet to create and market a media format that has gained mass acceptance. BetaMax was far superior to VHS, technically, but VHS won out in the end. MiniDiscs are actually pretty nice, but if you don't live in Japan, I'd wager you've never even seen a studio album on one. It never happened in the US or Europe. Memory Sticks? Pff!
And with the backers, just take the side of Microsoft, love em or hate em. In the end they'll buy the support they need if they have to. It wouldn't be the first (or last) time.
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