Blu ray a winner?

So Toshiba has withdrawn from the HD DVD format battle. I’m not surprised. Blu ray is a superior product and comes in a PS3, two very compelling arguments to any movie studio looking to get their product out to a mass audience.

But how long will blu ray last?
I only ask as HD on demand services are growing all the time and these compete directly with HD DVD and blu ray discs. While blu ray may be superior to anything currently on the market, this does not in itself lead to market demand. Currently consumers are provided with the majority of their TV viewing in standard definition and so only dip in and out of the HD listings. The majority of homes do not have access to an HD TV which makes the market relatively small.
Netflix and itunes have announced plans to offer HD through a broadband connection, cable and satellite companies already over HD services, so my point is that, as hardware, blu ray may only appeal to a few hardcore home theatre enthusiasts. As broadband speeds increase, net tv is going to become more reliable and more convenient, and thus will we really need another box under the tv?