I have always understood generational transitions of media technology will (hopefully) achieve the two following goals; increase data density and increase quality (the former usually supports the latter)...
Downloading MP3's and dumping them onto CD-R's or iPods is a good way to cram tons of media into a very small physical space. But Forrester is talking about streaming and downloading. The streaming part will indeed make money, but it isn't going to kill physical media. My car doesn't stream.
Downloading will likely enforce and expand the physical media market by forcing consumers to offload their music and movie files to CD-Rs and DVD-Rs so their hard drives don't get packed full. Also, hard drives in computers aren't very portable, and in a way, represent lower data density (due the fact that large box with data in it essentially lowers the density of the data load within it).
If we think forward for a minute, we might see the following occur. The convenience of media downloads offsets the lower levels of quality, and people buy the content. I'm not sure that convenience does indeed trump quality, but let's pretend it does. People download lots of music and movies, and quickly realize that the downloaded movies don't look so great on their computer monitors. So they try to move it to their TV, and realize that their 34 inch Sony Vega's makes it look even worse, and they go back to buying DVD's like "A Bug's Life" which is a pure 100% digital transfer, and is utterly gorgeous in progressive scan.
Do you get my point? Downloading has its place, but so does portable, static, high quality, extremely dense, media formats.
[Note: I was at the beach last week. It was great.]