With the advent of Xbox 360's New eXbox Experience, particularly the party system and NetFlix, alongside Sony's impending launch of Home, it's really crystallized to me how important/imminent full digital distribution of media will be and already is. Now, I've been a staunch advocate of DD for a while now, but it's even amazing to me how quickly we'll be transitioning over, especially in the video game/movie space.
The two big catalyst factors that are pushing DD forward are that they promote SOCIAL and IMMEDIATE.
Social - Xbox Live Parties, Playstation Home... these are two services that bring people together online to share experiences with one another. Play games together, watch movies together. Where: "together" means sharing the same content at the same time and communicating through voice and other means simultaneously. Now, the reason why social is ushering in digital distribution is a matter of convenience. One side of convenience is in procuring the same content, and the other side of convenience is launching the same content.
I'll illustrate by example:
I am in an Xbox Live party with 3 of my friends, currently in my console is the game Bullet Witch. Now we decide that we want to play some Call of Duty 4, so now I have to get up, switch discs, and load the game. After we're finished playing a few rounds, I have to get up again, switch discs, and launch Bullet Witch.
The obvious way that DD would make my life easier is that I wouldn't have to switch discs, since there is no "disc" to switch. I would be able to launch COD4 instantly and be playing in under a minute. Now, the obvious retort is "Are you seriously such a fat lazy SOB that you can't get up from your chair to switch a friggin disc?" And I say YES! The whole point of playing games/watching tv and movies is to be a lazy ass and just chill out. If I wanted to be active at that time I'd be out playing some sports. Having to get up from my very comfortable position takes me totally out of the experience and is annoying. Furthermore is the time savings: most people don't have too much time these days to play games, so every minute saved counts. Usually it's not worth it for me to switch from one game to another if we're just playing for 30 minutes or so.
Immediacy - in the example I just gave, what would happen if I didn't HAVE COD4 yet? What would be my options? "Sorry guys, I haven't bought it yet, all the local stores are sold out... yes yes I should have pre-ordered, now shut up." With digital distribution I'd be able to download the game right then and there without having to go to the store. We already see this with PSN, Xbox Live Arcade, Steam, and WiiWare/Virtual Console. Much more convenient.
And this is just the first stage, once we move to a full digital model we'll start to see even more innovations. Imagine being able to switch back and forth between games truly INSTANTLY without losing your state at all? What about streaming games, like we have streaming music?
Physical media was just served a notice, and it'll be on its way out in the next few years.
Now get NetFlix to come to Canada.