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there's always going to be a fairly sizeable physical market because of people not having access to internet that's fast enough to stream in HD yet alone download in it (without it taking ages anyway)

I mean, I live in a sub-urban town in the UK and there's not even Fibre Optic here yet so our speed is only like 2mb/s

on that I can barely stream in SD most of the time so I still get blu-rays more often than not, you will find this is the same in a lot of places so until you have near universal fibre optic broadband coverage then you are basically looking at the physical market still being very viable.