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As people get more comfortable with the idea of connecting their web experience and the TV, streaming TV programmes and movies onto the bigger screen rather than the laptop will become the norm, analysts say. The new wave of digital media services starting to flow into the living room was exemplified by the launch at CES of a new line of HD televisions from the Korean television maker LG Electronics that connect directly to the Internet with no set-top box required. The televisions will be able to play movies and television shows from online video-on-demand services, including Netflix.

Apple's online iTunes Store introduced high-definition movies a year ago and already has 600 titles available to rent or download. A similar Internet-connected box, Vudu, can access about 1,400 high-definition films. While both services remain niche products, supporters say the convenience of streaming and the rising acceptability of watching video content on the big screen will quickly force this into the mainstream. In the UK thanks to services such as BBC iPlayer and YouTube, Gartner, the technology analysts, predict that almost 20 million people will be subscribing to internet TV platforms by the end of this year, a rise of 64 per cent in 12 months.

The biggest obstacle to the wide adoption to video streaming, especially in the UK, is the lack of high-speed broadband in many homes. Millions of internet customers are getting less than half the broadband speed they are paying for, restricting their ability to download music, film and games, according to a report this week from Ofcom, the telecoms regulator. Slow internet speeds can cause streaming images to judder to a halt and make watching HD films unthinkable. It takes about eight hours to download HD-quality films over a normal internet connection of about two megabits (Mb) per second.

The recession, perversely, may be about to provide a solution to this - and hit the growth of Blu-ray twice over. Analysts expect that the lack of consumer spending power will hit sales of Blu-ray discs and players, despite the tumbling prices. The economic woes come at a crucial time for Blu-ray, three years after launch. DVD really took off after its launch in years four, five and six.

Spending on high-speed broadband infrastructure, making streaming of movies faster and much more inviting, is likely to be the second indirect consequence of the recession. Providing high-speed broadband for every American home is set to become one of the main planks in Barack Obama's economic rescue plan in the US. In the UK Gordon Brown has also talked about upgrading the country's ageing copper wire network and BT has proposed investing £1.5 billion in a fibre-optic network to give 10 million households, or 40 per cent of the population, speeds of 40Mb to 60Mb by 2012.

Not that the Blu-ray backers are going to give up without a fight. The big manufacturers and studios have invested billions on the format.

They point out that a new feature of Blu-ray called BD Live (Blu-ray Disc Live), which lets people download additional material from the Internet and interact with friends in text chats that appear on the television while playing a movie, makes the format more attractive.

Many of the new Blu-ray players launched at CES have this internet access built in.

But perhaps the one thing that might just rescue Blu-ray in its make-or-break year is the preference of human beings to own things they can handle. For many people, having a movie in a physical format will always be more preferable than having it on the hard drive in the computer.

Mr Powers, chairman of the Blu-ray Disc Association, said: "If you are going to own something, there is nothing better than a disc, what I call content real estate. I can put my Blu-ray disc on a shelf and watch it later. You can't do that with a download."

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