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Sony to exit the recordable Blu-ray market this month in another blow to physical media
(www.techspot.com)
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Modern encoding formats can also do a lot better quality at a lower bitrate than Blu-ray, and do dynamic bitrate depending on the amount of change in a scene.
Like you said, most people just don't care. The quality is good enough.
UHD bluray uses H.265. That's one of the best codecs available right now. AV1 can do a bit better for certain content, but it's not a huge difference. Basically nothing supports H.266 yet and AV2 is still in development.