WRT physical media. I haven't met a single person yet that hasn't fallen in love with the idea and implementation of local digital file/stream distribution once they've seen it in practice, usually here in my installation.

Friends with kids immediately see one of the enormous benefits - no more scratched discs. Wives love the fact that the space around the TV is much cleaner by losing disc-playing boxes. And that's speaking only of movies, because as far as music goes, I can't think of anyone whom I've seen play a CD in the past 5 years (or longer). I've been 100% server-streamed for over 6 years myself.