So, if the movie companies saw the light of reason, they would use an advance compression technique such as Divx5. But these things are always changing, and there are different formats. I use Avidemux to decipher and convert formats. This is also where having a 64 bit dual processor comes in handy, because it takes some time to convert. Luckily, a lot of promo-movies are now available as Divx5, so I don't need conversion.
As I've said, I'm only talking public domain movies here, until the movie companies wake up. In the future I see compression techniques matching with the end device. For example, the PS3 has these incredible side-processors, like a super-computer, that make for great 'upscaling'. That's taking a dvd movie and making it look like a blu-ray. Right now, for me, a good quality, compressed movie looks like blu-ray at 480p, which is the best that my big screen can do.
You'll want to store all these bizarre movies, and the best way to do it, is with a media-server. I use Mediatomb, and it's fantastic. It can store movies, photos, and audio. It streams them over your network wires, so the playing device doesn't have to store anything. (Wireless is hopeless here!).
We need a word on how the movie companies will eventually get these movies to the home, which is a real bottleneck. They could use dedicated servers. I would recommend imprinting each movie with the customer's name, since they can sell children's books this way. It makes for a very expensive system.
On the other hand, they could use existing resources. I use gtk-gnutella, that has a direct Bitzi connection to flag dangerous files. As well, I also use Bittorrent. Both these services are nearly identical, in that they split up the movie into a zillion pieces, and all the people who are downloading, are uploading little pieces as well. It becomes efficient when there are lots of people involved. I can sometimes get my full 700 Kbytes/s with a dozen feeds. Of course, there aren't that many people looking for the totally legal stuff, like me!
Next: Getting the equipment.
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