I think the future of content on demand (movies, music, educational programs, TV shows, etc.) will indeed disrupt the music and movie retail industries in time.
There does, however, still seem to be some advantange to owning some movies or program on one's own storage media. I think of my nieces and newphews and how they have tended to watch the same videos over and over and over - dozens of times. It might be prohibitively expensive to keep paying for VOD each time the toddler begs to watch Barney again.
I wonder if they could have a two-tiered price system - one for downloaded content and a lower price for non-downloadable content (view only content). The technology is advancing so quick it's amazing.
As for music, I think owning your favorites on some sort of storage media will be more pervasive than movies, which are already widely available on demand through the cable companies.