There's no doubt that IPTV and downloadable video is growing. In fact, a recent study showed that in some areas it is exploding with growth, such as in Europe. It was a surprise, then, to see a report that some analysts expect this growth to shortly stop and ultimately for online movie sales to have no future. Various reasons cited aside, such as difficulty in managing formats and the downsides of watching on a PC, Forrester Research is claiming that “better ways” are coming:

"In the video space, iTunes is just a temporary flash while consumers wait for better ways to get video. They're already coming," said Forrester Research analyst James McQuivey, the author of the study, who also called the paid download video market a "dead end."
What “better ways”, exactly? The movie industry is at least opening up to the idea of the Internet as a distribution mechanism, and it's not often that tools are discarded once they are found to be profitable. Even given the difficulties faced such as DRM woes and a 19” LCD not quite being the same as a widescreen HDTV, I think this research is a bit sketchy. Media machines plugged into TVs are more common than ever, multiple movie producers are now releasing movies online and the propagation of the Internet only makes it easier. While there may be a point in free content vs paid content, the idea that “iVideo” will shortly fail seems pretty off base to me. Apple may not be able to expect record-breaking growth year by year, but I doubt they would be pursuing this if it were a dead end.