Will home movies divide into two?

Via Geoff Forgie, it turns out that Blockbuster, the video rental chain in the United States, has gone into Chapter 11 bankruptcy (this apparently lets them off their debts, but continue trading) owing tens of millions to movie studios.

Which makes me wonder, is video rental a dying industry? Will the rental market move to almost entirely on-line via downloads or streaming (eg. Bigpond Movies), while DVD and Blu-ray become ownership-only deals.

Or if Blu-ray becomes sufficiently popular, will this keep video rental stores going? Bigpond Movies has a bitrate of 1.8Mbps in Windows Media format, which is stretching things a little for high quality SD. It’s going to be quite a while before full HD movie downloads become viable.

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