Lots of people think they know lots of things. In my experience they know half as much as they'd expect, and expect they know about twice as much as you'd guess of them during a conversation. Well, I'm not one to judge but I've had this conversation with too many people who don't know what they're talking about when it comes to media. Essentially they the argument is that the models of digital downloads will replace retail and in many cases, the need for retail and manufacturing altogether.
Here's why that's not going to happen for at least a decade, if at all.
First, people aren't taking into account quality. Anyone who knows anything about data knows that the highest file sizes in media come from two places: sound and moving image. With audio, compression can save you a good amount of space at the expense of quality, but hi-quality audio gets pretty massive. And in first place of course is video. Moving pictures, even at a compressed rate, become absolutely astronomical very quickly. Codecs (compression/decompression algorithms) aren't going to save you that much space when you're talking about delivery of quality assets- 1080p HD video with 5.1 or 7.1 surround is what people want to fucking watch, alright? Hell, they expect it. And when you talk about digital media downloads, of films and such, you're not only talking about taxing storage solutions, but you're also talking about dealing with the [unnecessary] bandwidth caps of most American ISPs.
Second, people are forgetting ownership. If you buy a film digitally, it's sitting on a hard drive. If you buy a film in stores, it's palpable. It's on your shelf. It's unique in that it is your copy of something. It's a tangible purchase. Whether or not you think this is a good thing, you can't ignore the fact that having a tangible collection will always be more reliable, accessible, and collectible than digital media. Or, in some cases, some studios are bright enough to include a lower-res copy of the film for ipods/itunes on the disc(s) as well.
Third, Look at Apple TV. This is essentially the same thing you're talking about. So far it's been a dud in the Apple lineup. This comes back to quality. Why buy a movie if it's going to be 640X480 resolution? And still push 300-600 megs a film! Storage is getting cheaper, but that doesn't make these look any better when you full-screen the thing. Sure, they'll play on an ipod but nobody crowds around the ipod to take in a good flick.
People expect some kind of information revolution to whisk away the need for stores and hard copies of things on disc, but they don't realize that what they're talking about would be another product to replace a computer or DVR that essentially does the same thing in one concentrated place. (Another box on the shelf that does stuff? Good luck, Marketing.) I just need something that plays movies, man. Console movie downloads, iTunes movie downloads and rentals, instant viewing on Netflix- these things are a step in the direction for the so-called 'information economy' taking over media distribution. But completely replaceing cold, hard hi-quality media is pretty far away for those three reasons above and more.
To be fair, the people I talk to about this don't work in, on, or with this media. They're actors, journalists, writers. They'be never had to allot hard disk space for HD renders or spend hours tweaking compression for download and then cringing at the inevitable picture/sound degradation. They also don't realize that for the last 10 years, DVD sales have been 46% or more of the revenue stream for the major studios. For a good reason. Reliable, good picture quality, disc-based, attractive replacement for VHS, simple to use.
I could be proven wrong. Someone could blow Apple's h.264 codec out of the water and combine it with a solid-state storage solution with a low-cost fixed-rate fiber optic delivery system and a sleek, fast UI that puts every movie ever at people's fingertips. But if the quality isn't top-notch it won't go anywhere and lots of investors will lose lots of money on phantomware.
I was just writing a post to those people and those who agree with them blindly, saying, basically, it's like flying cars. Don't hold your breath.
A self-indulgent post? Maybe. But media is in the half of what I think I know that I do actually know. I think.