I believe the sustainable model for media distribution is to micro-charge multiple time for the ability to timeshift and placeshift content. A convenience tax, so to speak. Physical mediums are antiquities in our digital device world.
Those eggheads over at YouTube/TiVo/Apple/Amazon/Microsoft surely must be working on something like this. I mean, how else do any of them justify their salaries?
I don't know if "antiquities" is quite the right word. There's always something to be gained from the existence of the physical format. With albums, for instance, there's the artwork and file quality that you can only achieve with records. (It's why new record players are still being made.) Books can achieve things that ebooks cannot. Same with paintings versus photographs, plays versus movies, DVDs versus digital downloads.
Better to say that the physical medium is no longer the only existing medium. Where they once dominated, now they'll become niche like most mediums do once they're past cutting-edge. But antique suggests something that's over and done with, and incapable of advancing. On the contrary, I think that physical media will continue to innovate.
Records do you give you room for much higher resolution album artwork, but the best produced CDs sound better than the average record. The average record sounds better than the average post-loudness war CD.
HD-DVD/DVD-Audio sound decidedly better than CD/vinyl assuming you have a sound system high end enough for it to matter. There's nothing inherently better about analog, unless you're talking about copies of the original analog master tapes. (There was a company selling a subscription to a service where you would get copies of analog reel-to-reel tapes)
They will no longer be used as a means of distribution but rather products or art to appreciate on its own merits for the subculture of people that still obsess about something like that. Cultural artifacts of antiquities.
Amazon won't win in the streaming / file space unless something changes.