There are plenty of boutique brands out there that have taken up the physical distribution in lieu of the content owners. As long as there’s a market for it, physical discs will still exist. There are definitely some companies that have decided not to license out distribution but they also own their own digital platforms (looking at you Netflix). Fortunately, much of what they produce is merely content and not worth owning.
I mean, it is in my house. It’s on my computer. But now I can access it from anywhere too.
I will admit that I prefer accessing my movies digitally. I will also admit that I absolutely prefer actually owning things I buy. So the compromise is to buy a disc, rip it onto a computer, and access it from there. Physical media won’t die until digital rights actually represents ownership. Unfortunately procuring those discs will likely continue to be more expensive and the discs themselves less prevalent.
The real reason we have DRM-free stores is because there’s no copy protection on CDs themselves. Companies tried and failed several times to add copy protection to CDs. That, on top of a great public outcry, is the reason we have those online stores. For some reason the public didn’t fight as hard with video and rights are a lot harder to manage with so many contributors.
You’re right that Musicians can publish their products on their own because the funding requirements are much lower. Movie/TV costs have skyrocketed and very few can afford to publish their own products. Just look at Coppola with Megalopolis. He self funded like $200 million for the movie but still had to get a distributor.