The issue is really HDD space not bandwidth imo, if you had a ton of HDD space with a little creative thinking alot of the problems could be avoided.
For example, you could have multiple versions of an HD movie, a quick play version that was 6-8mbit, that could stream/download in approx 30minutes, and then have the true 16-20mbit version that could download in the background. That way, when you purchased a movie you could have multiple options to view it depending on how quickly you needed, and some smart software could ensure that within a day or two that version is upgraded to full HD w/ all the extras etc. Of course, this would require 20-30gb of space for a single movie, so you can see how integral HDD space would be.
Same goes for games, some creative thinking could solve alot of the problems. For example, you could have games downloadable 24-48hours before launch, and then have them enabled with a unlock key, that way the people download could actually get it faster than retail stores, and unlock it on day 1. They could also split the games up if feasible, even if the whole game is 12gb, the first 3 hours might only be 2 or 3gb which is much more manageable, the rest could background DL. Not a solution in all cases, but another option.
Bandwidth should be there on the consumers end in 5 years, it already is in Urban ccentres in Canada (6-8mbit) but it's the server bandwidth that's the issue, and of course affordable mass storage.
With all that said, nobody is fortelling the end of physical media here, it will be a combination of the two without a doubt.