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Most surfers seem to love downloads and don't really care for streaming. (My guess is the downloaders are collectors and the dial up folks who can't stream anyways)
Personally I like streaming as long as I can skip to different parts of the movie. This way I can see if I like it before spending the time to download the whole thing.
BTW on your drive space issue, you can get a RAID 5 server with 5 x 250GB drives (1000GB of storage plus an extra drive for backup)
They're not that expensive.
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