static or dynamic ads?
I like to comment without any research so here goes:
I suspect the adverts would be static so they work on normal dvd players and the media will be given away free or almost free. So its like TV but you can get the whole series to watch when you like.
This gets around the problem of media pirates who duplicate disks - the disks contain ads and the more pirated copies, the more ads are seen, the more valuable those ad spaces are and the more revenue the media companies can get for them.
You can then pay the normal dvd price to get the disk (or rather, your player) unlocked which removes the ads. That's great because when you move from DVD to blu-ray, you have a new player and you can pay all over again.
Perhaps more importantly, it catches all those commercially irresponsible people who don't rush out when a film is first released in order to pay full price, but prefer to wait a couple of months and visit the local car boot sale to pick it up for a quid.
With DVD players costing not much more than a couple of DVDs, I wouldn't be surprised if the "improved" players were given away for free, maybe with tivo-like dvr capabilities.
As far as blu-ray et al are concerned, one of the great advantages of having a games console with internet gaming capabilities is that there's a good chance you could use that connection for pretty much anything you want.
For my part I have no interest in "owning" dvds. You don't own the content anyway and once I've seen a programme (thank-you MythTV and k3b) I delete it.