We are cord cutters, and when Netflix announced their new pricing, I also thought really hard about how much we use the disc part of the plan. We often get a BluRay from Netflix and then let it sit on the coffee table for a month and a half before everyone is in the same place at the same time to watch it. That being said, we cancelled the discs.
I decided that if we want a brand new movie, we could get it on iTunes or Vudu. We do not have to pay monthly for the months we don't watch a newer video, and we can have the brand new stuff without the 30 day waiting period that you are stuck with on Netflix. Plus, you don't have to time it out so you get the next movie by the weekend. You just download/stream it and watch it.
In the last 2 weeks we have rented 1 full movie and purchased two TV show episodes on iTunes and used the HDMI attachment to play them off of the iPad to the TV. They look and sound absolutely terrific--even better than the HD content looked when we had Comcast. I am very happy with our decision. I have not had any issues with aspect ratios--the stuff that is supposed to be full screen is full screen, the movie rental we did had letter box on top and bottom, but our BluRays all did that too. The Dr. Who eps we watched last night filled the whole screen and looked TERRIFIC.
I think disc based content is on its way out, and I'm totally fine with that.
PS: have not tried Hulu or Netflix because we have the Roku box for that.