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It's an old model, but it's one that everybody can easily understand. iTunes succeeds due to its ease of use, but that's still in the realm of computers in a world where most people still watch things on their tv screen. Moreover, are the consumers properly wired up for such a new way of doing things? The infrastructure simply isn't there yet. We're in the road of connecting the two, but it's still relatively new territory for a lot of people out there. So yes, generation and demographics do matter. People who grew up with the internet will undoubtedly find all of this second nature compared to older folks.
In fact, that very scenario you talk about still sounds so "techy" for the average guy. One still has to set up all of that together. It's not an easy thing compared to connecting your player to the tv and inserting the DVD. Moreover, you'd have to take into account the varied audiences. Collectors may still prefer something tangible, with special editions and limited versions. Others would rather display them on a shelf than keeping a hard drive, etc. Heck, the same can be said of gaming.
Don't get me wrong. We may be indeed heading for such a future. But that isn't now, nor will it be for quite some time.
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