As Bill Gates commented way back in October of 2005, downloadable standard- and high-definition video content is a credible competitor to Blu-ray (or for that matter, any high capacity optical disc), especially for folks with high-bandwidth downstream WAN connections. Microsoft has a proportionally lesser investment in HD DVD, and the company also 'wins' on a number of fronts (codec, DRM, IPTV software, etc) if downloadable movies take off big.
And they are beginning to take off big. Sony can't ignore Microsoft's success in this arena with the Xbox 360, especially now that Disney's on board (I wonder what Steve Jobs thinks about that?). I've personally been pretty pleased with the console's video playback capabilities, both direct-to-console and streamed. The more Sony drags its feet, the more traction Microsoft gets. And with the Blu-ray vs. HD DVD format standoff showing no clear sign of ending any time soon, I 'spect Sony's warring internal format and product division factions have decided to call a truce and bless the genesis of a Sony-branded downloadable alternative to Blu-ray.
It's almost a month since v1.82 firmware was released, and since I began anticipating the unveiling of Sony's PlayStation Video Store (or whatever they'll call it). I thought, as did others, that I wasn't going to be able to get this blog post published in time, because Sony would unveil the service at E3 two weeks back. They didn't, and I'm not quite sure why. Maybe, as I postulated with respect to a past Apple introduction, there was a last-minute business or technical glitch that delayed the public launch. Or maybe Sony's executives decided that, since E3 is fundamentally a gaming show, they had enough game news as-is to fill their event and didn't want to confuse the pitch by lumping video stuff in, too.