You might think I would hear about these things sooner. Here is a project that has been around since last May that I just learned about yesterday:

ratDVD Official Site

From what I gather based on the website, it is a container format that allows complete encapsulation of a DVD for internet distribution. It can retain menus, navigation, subtitles, special features, etc. It apparently also transcodes video to a custom format named XEB. It also uses some custom variant of the Dolby AC-3 codec called AC-3 VS (virtual surround). These details are a bit sketchy since there is not much code available. The developer claims to want to work with the Linux community to come up with a suitable playback solution.

My first impulse at seeing this was similar to my reaction towards Matroska: Special Microsoft operatives attempting to distract open source multimedia hackers from focusing on more important matters. Not to be outdone in the more-work-for-the-community department, the Matroska developers have a draft of a similarly capable system.

An impromptu search on BitTorrent networks reveals that people are already pressing ratDVD into service for its stated purpose, e.g., making available for P2P distribution such niche-interest media content as Star Wars Episode III and full seasons of 24. So I imagine the demand for this format will eventually grow.