Last month I spent just under $20 on Internet-delivered video versus $70 for my typical cable TV bill. Year-to-date, my spending is $127.14 versus $280 for cable.
More than half of my spending last month came from the Xbox Live Marketplace's 720p movie rental service. For 480 Microsoft Points, about $6.53 with tax, I can download a large video file for a movie. I have 14 days to watch it, and from the first time I hit play I have 24 hours to finish the movie before it becomes unwatchable. My DSL at home is fast, but even at 7 Mbps it takes at least two hours to download a movie in its entirety. I've been downloading movies intending to watch them the next day -- not exactly real-time, but they work okay.
I also tried out a kiosk that was recently installed in my local supermarket. It's run by a company called The New Release, and it's basically a DVD vending machine. You swipe a credit card and choose from about 100 movies; it vends a disc and charges you $1.00 per day plus tax. After 14 days the machine charges you $21 more to purchase the disc, and you own the disc outright. This works great on paper if you want to see a recent hit for much cheaper than on the Xbox, and without the need to finish a movie within 24 hours of starting it. Unfortunately for me, my rental disc was scratched. At least The New Release staffs their call center on Sunday nights, so they reversed the charge and I deposited the disc in their special hidden bin for defective discs.
Downloading will only work better as fiber-to-the-home connections like Verizon FiOS spread 10, 20, and even 50-megabit lines to residential customers. In the meantime, disc services serve a middling need at best. Netflix takes at least a day to get a disc to customers, more if you order one on the weekend (when you actually have time to watch movies). The New Release and other kiosks can only have so many movies on hand at a time. Wouldn't it be great if I could get a movie on disc from a kiosk on demand -- pay $10 or so, go shopping for groceries as the kiosk downloads the movie, and pick up the completed disc on the way out? I don't know how the economics or technology would work with regard to renting, which is what I really want, though.
My Sony TP1 still shows a ship date from Amazon of June 11. Sony's own shop suggests May 23 as the ship date. Meanwhile my Xbox still works as well as it ever has.