I still see DVDs and Blu-Ray discs at the store, I even buy some. On the other hand I recently bought a VHS deck for $15 from the local "reuse center" where you can buy (not rent) the tapes for 50 cents.
Plenty of people still have a working DVD player and never got a Blu-Ray player. If the people in the authoring department do their jobs well, a DVD looks pretty ok compared to typical 5Mbps streaming video.