One lesson that everyone in the specialty AV business has learned from the Apple iPod is that if a consumer is given the choice between performance and convenience at the same price - the consumer will pick convenience first. The idea of having a 3,000 album collection of music in one's hands is just too powerful to combat the fact that the music is compressed to the bejesus and sounds like bloody-hell in your beloved ear buds. 5.1 surround, 24 bit audio and 96 kHz compression is thrown out with the bathwater when given the chance to squeeze more songs into a hand-held device. That's just a modern reality.

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When it comes to movies, things have been a bit different. Movies in DVD resolution are harder to steal over the Internet than albums or even songs, as movie files are a lot larger. At the same time, sources like CinemaNow and Netflix are serving up streaming movies at sub-DVD quality video and horrendous 5.1 audio quality but giving consumers access to volumes of content with one-touch accessibility and sub-$4 accessibility. People are lining up by the millions to stream movies through their various devices, be they HDTVs, tablets, phones and beyond. They will take convenience over quality even if it regresses the home theater experience to late 1980's levels of performance.

The next level of consumer electronics magic is likely to be engineered in the realm of HD compression. Blu-ray discs are clearly the reference standard for 1080p video and uncompressed 7.1 HD audio but those files don't flow very easily though the Internet. The question is: who can make a Blu-ray disc quality experience happen first without a disc? That company will make a king's ransom worth of money, without question.

Many are asking how movies from 35 mm film or 2k/4k native files can make it onto Blu-ray discs? It's possible but the consumer electronics powers that be all have to agree on a format. Ask anyone with a pair of glasses that work with a 3D Panasonic set but not on a Samsung; how will they like a format war? Ask the same person how they feel about HD DVD disc versus Blu-ray, as it's the same argument. Everyone in consumer electronics is afraid of another Sony runaway success story like they had with the Compact Disc nearly 30 years ago. And because of that fear - they are willing to host a holy format war that is guaranteed to scare away tens of millions of potential consumers.

The future of home theater is not locked into any silver disc format. Streaming is the future of content; however going 20 plus years back in quality is not going to help the high end or high performance portion of the market, which is where most of the enthusiast customers are. The company, whether it's Sony, Rovi or even Microsoft, who can come up with a way to get Blu-ray quality audio and video through the Internet compressed in a way that doesn't piss off the ISPs, will be the next big winner in the world of consumer electronics. Count my words.

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• Read more original content in our Feature News Stories section.
• See similar stories in our Streaming, Apps, and Downloads News section.
• Explore similar articles in our Industry Trade News section.