Consumer entertainment is in the midst of two radical transitions: the shift from analog to digital and the shift from physical media to Internet distribution . The shift to digital is almost complete, but the shift to Internet distribution is still far from over. The first content to make both transitions was music. While there still exists substantial physical distribution of music on CD, Internet distribution through services such as Apple iTunes is rapidly eclipsing CD sales. Video is now largely digital, but has been slower to transition to Internet distribution. There are technical reasons, such as multi-gigabyte file sizes and multi-hour download times, that contributed to the initial delays, but with today's broadband services and increasingly affordable high-capacity hard drives, the real stumbling blocks are now the business models. . To date, Internet video distribution has followed three basic models: a la carte pricing where a fee is charged to rent or purchase a show, advertising-financed where the viewer "pays" for what they watch by looking at placed ads in the program. streaming and subscription pricing where a recurring fee is paid to access a library of content. This article examines all three and draws conclusions about which of the three will win in the end. A la carte pricing was the first business model used for Internet distribution of video content and still dominates today. In this model, consumers pay a fee for each title downloaded. The fee can be a few dollars for a show that they "rent" and have access to only for a limited time, or ten dollars or more for a show that they "own" and can watch indefinitely. Movie studios and content owners like this model because it is a familiar extension of the pay-per-view, video-on-demand, DVD sales and rental models they have profited from for years. Unfortunately, this model is not very popular with consumers, and this is evident from the relatively low acquisition rates for all these forms of electronic distribution. I believe there are two reasons why this is true. First, none of these models offer the "bang for your buck" that buying a DVD offers. When a consumer buys a DVD, they instantly get a show that they can play in the living room, bedroom, car, PC or portable DVD player. It's portable, compatible, and often includes great menus and extras. So far, most digital downloads offer only a fraction of this.