Thanks for making the jump. Now comes the pay-off. Here goes....
The answer is NEITHER and/or none of the above (and I don't mean none of the above in a Richard Pryor in Brewster's Millions type way....)
What am I talking about and what am I saying? I'm saying and talking about the fact that none of these hi-def viewing solutions will be the winner. NetFlix isn't going to win, nor will Blockbuster.com. HD-DVD will likely never win the format wars, but at the same time, Blu-Ray disc may not win either.
How is this possible? It's not just possible, it's probable, which is my point here. None of these solutions will win the hearts and minds of the customers that they are aiming at. Viewers that want more high definition content will likely get it from sources other than these choices. Sources such as cable with their video-on-demand offerings, TV over FiOS (for customers lucky enough to have that offering), or even satellite customers who have video-on-demand offerings showing up soon or already available to them.
These video on demand sources, as well as premium (pay) channels that are moving to high definition formats are going to leave the 'old media' of TV viewing offerings behind. Customers are going to wind up renting content (pay-per-view), or getting it for free with some free video-on-demand offerings, or getting it as part of their cable/satellite subscriptions. The amount of high definition programming that is coming to cable and satellite customers is about to expand exponentially, and the choices available to customers are going to be over-whelming.
Personally I've put the slow-down on buying more HD content 'to own' because I don't want to waste the space to house it all when I know I'll have a wealth of choices available to me to watch just about anything I want. I can stream movies on my Xbox 360 over the Marketplace, or soon I'll get video-on-demand from DirecTV, or just watch content on Starz! HD, or HBO HD, Showtime HD, or a whole host of other channels coming in high-definition this fall.
Why should I waste my money, and my limited space in my home, to buy up copies of movies and TV series on DVD or other disc formats when I can watch so much high def content on my TV without having to go to the store to get any of it? For less than the cost of one HD-DVD (way less than the cost of a typical Blu-Ray disc) I can get HBO, plus Starz! or Showtime for a month. I can probably have all 3 if I am thinking about buying anything in Blu-Ray format. If I was buying more than one disc in a month at current pricing, I'd easily be able to get even more premium programming or just factor the costs into the base price I pay for DirecTV service.
I've seen some people talk about the idea that they won't buy into the next generation disc formats until the discs are in the bargain bins and are available at under $10 each. They may see those prices in the next few years, though it took a while for such pricing to arrive in the DVD market. While those prices are dropping, the competition from pay TV choices will be hitting both HD-DVD and Blu-Ray hard, and NetFlix and Blockbuster.com will likely take a ton of collateral damage.
Will either be left standing at the end of the fight? You tell me.