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It's like iTunes. It's great for some uses but not always. I doubt digital downloads will entirely replace cds/dvds, unless technology improves.

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I'm lazy and disorganized, I hate filing. How much easier is it to look at a pile of dvd boxes with pictures on the covers that help remember what is on a particular dvd, and where that on scene is hiding that actually turned me on.

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I agree with you on this. Personally, I'm a movie collector, whether it's porn or mainstream movies. I like to have a physical product in my hand. However, there's an increasingly large number of folks who'd much rather have an entire library of porn at their fingertips, 24/7. If it's 3am, and Joe Consumer needs something new to jerk it to, he's two clicks away from damn near any kind of movie that he can imagine.

*Example... convenience stores tend to be overpriced, and sparse in the grocery dept, but there's always a 7/11 nearby if you need a gallon of milk at 3am.*