I wonder at his premise that consumers are choosing things based on wanting larger file sizes and higher bit rates. Most of my friends literally could not tell you anything about their mp3 or movie collection in terms of bit rate. Half of them you'd need to explain what "bit rate" means, before even asking the question. I only think about it for my DJ music collection (and VBR is fine in that context, I'm just ruling out CBR stuff below ~192kpbs, because sometimes it sounds a little harsh on the high end over the big speakers); never worry about it for video or music streaming. If it's HD and looks/sounds OK, I don't think about it at all. Netflix and Amazon both have acceptable quality, so I don't think about it, I just consume it.

I think the success of Spotify and Pandora and Rhapsody are proof that consumers don't care about quality. I don't know exactly what bit rate they're streaming at, but, it sounds pretty bad on mobile, so I assume it's something quite low. But, even though I recognize the crappiness of it, sometimes I listen to them in the car (my truck has a crap stereo, anyway, so no big deal there).

In short: Cool article, but the suggestion that consumers will stop it because they want bigger files seems weird.