Hell, even movie ticket sales (ticket sales and not ticket revenue) were in decline before the coronavirus hit. And the pandemic has basically decimated world wide ticket sales. it's another market that's slowly moving towards irrelevance. I suspect that you might have been one of the movie goers that enjoyed or would have enjoyed Laser Disc movie releases.
Regardless, the mass market is unlikely to ever again embrace physical media releases for film and TV. So, why not jettison the remaining mass market and instead focus on the high end movie and TV enthusiasts? In that sense, it would make sense to release a niche physical movie format at a higher price which would likely also come with higher profit margins as high end enthusiasts are more willing to pay a lot more money for a better experience.
Overall sales will obviously drop, but the market itself might be able to survive on the backs of film and TV buffs willing to pay a premium for better than streaming quality video.
Regards,
SB