In the past, BetaMax or VHS had to win - physical inventory costs made two formats impractical. This time around, in the battle of HD-DVD vs. Blu-ray, does one format have to win? I still see many pressures for a dominant format (e.g. desire for a movie to play on a friend’s player). Nevertheless, it seems like the presence of Netflix will reduce the pressure for a single format previously applied by your local video rental store. Netflix subscribers can list their format of choice in their profile. Because so much of Netflix’s inventory is “stored” in its subscribers living rooms and mailboxes, the impact of owning multiple formats of each title is drastically reduced.

The article that got me thinking about this: http://arstechnica.com/news.ars/post/20050619-5011.html