Digital distribution is the goal of mega theater chains. The goal is to control the entire process, and get rid of the distributers (who currently have a bit of a stranglehold). Many ginormous theater CEO's even dream of someday being their own studio as well.
The movie industry is large and complex. However, film still has a couple of things going for it. For one thing, in movie production (real movies with real budgets) the costs of originating on film is a small part of the overall budget, and it isn't any cheaper to shoot D, unless there will be an intensive post process with tons of effects. You don't get to photoshop your way out of crappy images, except at great expense. Why isn't it cheaper? Video requires a ton more lighting set up, more set up time, and more personel in the camera department. Film has the latitude to light simply, and quickly. Almost every real DP I know will shoot film, given the choice, and most actors, especially the female ones, hate the way video makes them look.
Keep in mind, I'm talking about real production here. When you hit the local level, and smaller budgets, low level commercial spot production for instance, the 24p now rules over 16. The producers save enough money, because they don't really care about lighting, never hire enough crew, and think it looks good enough (mostly it doesn't, but you would be amazed at what a couple extra thousand dollars in their shorts does to their taste) to make it viable for mid and low level production. They still charge the clients the same, but pocket the difference. The advantages of film aren't important at this level, because they don't care, they operate in a vacuum, and most clients aren't savy enough to know the difference. Good enough is simply the enemy of the best.
The good news is, all in all, motion picture film, at least the 35mm kind will be around for a while. Almost everyone in the film industry loathes digital aquisition. While there have been a few digitally made films, they are still the exception, although much hyped. The nightmare stories of forced-from-on-high electronic production abound in the industry, but never make the press. That might hurt the sales of advertisers hawking video cameras.
Will movies keep color still film around longer? Debatable, because it is different film from the color neg photographers shoot, and requires different processing, that processing doesn't exist down at the drugstore.
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