According to the NPD Group, more Americans use DVD and Blu-ray discs to watch movies at home than all forms of non-physical media combined.
More than three quarters of U.S. consumers continue to view movies on DVD and Blu-ray Disc; nearly 80 cents of every dollar spent on home video movies goes toward the purchase or rental of physical discs.
Personally, I'm glad physical media is still dominant. It is my desire to see Blu-ray continue to grow and eventually replace DVD. I realize that some people can't see or hear the difference in image or sound quality, but I certainly can. I haven't purchased a DVD in over two years and I've rented as few of them as I possibly could. With its 50 gigabytes of storage capacity (compared to DVD's 8.7 GB), Blu-ray is the only current physical media that has the encoding bandwidth necessary to deliver clean, artifact-free video on today's high-resolution television displays.
Streaming is Inferior to Blu-ray
Most movies on Blu-ray are encoded at a healthy 25-35 Mbps versus the 5-6 Mbps of DVD. Granted, DVD is pushing a smaller image through the "pipe" so it needs less bandwidth. But look at streaming providers. The bandwidth they encode their HD content at is, at best, about the same as DVD. Yet, they are pushing a much larger image through their pipe. It's a difference that I can see, particularly during fast-motion sequences in movies and sports. Streaming just doesn't encode at a sufficiently high bandwidth.
If you want the best possible picture and the best possible sound, Blu-ray is currently the only way to go.