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Imagine this scenario. You've just received the latest Hollywood blockbuster in the mail from the DVD rental service of your choice. You've popped the popcorn, poured a tall glass of your favorite beverage, and settled back to watch the film on your flatscreen TV. 15 minutes or so into the movie—right as the action is building to a crescendo—the movie fades to a commercial. For the next minute, you're forced to watch the commercial as the fast-forward button has suddenly stopped working. The unhappy experience is repeated two or three more times before the movie ends. The only way to avoid the interruption is to pay another buck or two to the company you rented from.
the HD DVD spec requires players to have an Ethernet port for online connectivity. While the connectivity is intended for things like software and firmware updates as well as interactive content, there's no reason why it couldn't be used to download car commercials in 1080p.
If it's the latter, the disc player would phone home to an online service to download commercials or play ads embedded on the discs themselves.
It [embedding commercials] could also become a way to get back-catalog, niche movies onto DVD, as embedded, unskippable commercials could shore up the business case for cracking open the vault.