Digital Distribution is at a similar position today as MP3 players were before the release of the iPod. There is nothing "technically" wrong with Digital Distribution at the moment, its main problem is there is no product that will drive its adoption on the market (or on the horizon). This lack of a lightning-rod has nothing to do with lack of effort, companies have tried dozens of different products and yet nothing has really attracted people's attention.
Personally, I think the product that would attract a lot of attention would be a device/service that (essentially) replaces cable with downloadable content that is released at the same time/before it is released on television or in stores; if your favourite TV show comes on TV on Tuesdays at primetime, the show becomes available at 6:00pm for anyone who wants to watch the show. Kill the PVR, kill DVD, kill Blu-Ray and kill cable all in one swoop ... even at $150/month for the service (including cable, internet and telephone) people would see massive value in that service
