When will video on-demand be a reality?

There's an interesting article in the New York Times (free registration required) today about video on-demand service that says the technology is there, but a market for it has not yet developed. As the article opens, "For years, video on demand has been a couch potato's dream. By pushing a few buttons on the remote control, a viewer would be able to order a movie and then sit back and watch as it unfolded immediately on the screen, pausing, rewinding or fast-forwarding at will."

I am all for that. The problem it would seem is similar to the chicken-or-the-egg scenario: Movie houses are afraid the good movies will be pirated, security is expensive to implement on the cable provider side and end users don't want to pay too much to watch a movie at home.

Korea Telecom is using a different approach (warning: press release) by taking advantage of its deep broadband penetration by offering 2,000 on-demand movies streamed at 500K bit/sec to 1M bit/sec to the PC using Windows Media technology. Streaming to the PC here would be good and can be done, but who wants to watch a full length movie at their desk when the livingroom couch is infinitely more comfortable?