Originally Posted by TenoBell
That is a subjective assessment. I know filmmakers who hate the way their films look on DVD. DVD is not a high quality format it is extremely compressed. When comparing the original image to the DVD the texture and detail of the image is gone, colors are less vivid, blacks are not as strong and sometime a soft shade of gray, detail in the highlights are gone, and you can see some aliasing artifacts. We accept this a compromise in quality for the convenience of a 4.72 inch disc.
The iTunes movie is more compressed and uses a lower data rate than a high quality DVD uses. Which will result in lower over all picture quality. This compromise is made for the convenience of streaming the movie without waiting hours it would take to stream a DVD. If you are near an Apple store I suggest you check it out yourself and under your own discretion decide if the image is good enough for you.
No one expects DVDs, iTunes movies, or even Blu-Ray/HD DVD to deliver 100% theatrical experience. Perhaps filmmakers and telecine operators do, but film studios probably don't share their sentiments. Heck, most general public have SDTV or HDTV set at lousy factory default settings (e.g., insanely high brightness, halo inducing sharpness, bluish color temperature). Even with 4K elements, most general public will not experience theatrical presentation that filmmakers intended.
Let's draw some parallels from the audio industry. Audio CD came out about 30 years ago. Most audiophiles and musicians find CD to be inadequate representation of studio master. Due to format war politics, poor marketing, and perhaps even lack of interests, its successors (SACD and DVD-Audio) never caught on. About 25 years later, MP3 succeeded audio CD (although not yet completely), which has near-CD
audio quality at best. MP3 is clearly a step backward from audio perspective, but it won due to convenience (smaller file size, ID tagging, online distribution). Most general public can't tell differences between CD and MP3/AAC/WMA ripped at default setting -- and that's good enough for them.
Back to video. As you said, video DVD fails to capture theatrical experience, although it is significantly superior to (when properly encoded and mastered) all of its predecessors in terms of color reproduction, resolution, noise, and convenience. Apple claims near-DVD quality for iTunes movies. If only that's true. Anyone with a decent HDTV, upscaling DVD player, and Apple TV will easily spot the differences between iTunes movies and DVD. One would have to be near blind and/or deaf to not spot significant
differences between anamorphic DVD with DD/DTS 5.1 and equivalent iTunes movie. iTunes movies are closer to satellite/digital cable (non HD) than DVD.
The real question is whether iTunes movies are that much more convenient to overcome technical weaknesses. iTunes movies = DVD - subtitles - multiple audio tracks - discrete surround sound - anamorphic video - extra features - navigation menu - rental outlets + online distribution + often cheaper to own pricing + "diskless" immediate viewing. Since Apple TV cannot be used to purchase movies, it's not as convenient as it should be and lack of rental business model is a huge hindrance for most general public.