Tower Records – the mega-store music chain – has has filed for protection from its creditors for the second time in two years. It is, of course, a victim of digital downloading.

A few years back, when Amazon started to loom large, there were predictions that bricks and mortar book stores would go out of business – but so far plenty of people still like to turn paper pages before they buy. This seems to show that readers enjoy buying a physical product.

Now Amazon itself is threatened by the trend to go digital. The Economist predicts that Amazon is preparing to go into the download business. It might be too late to dominate music, but the field is still fairly open for video and, perhaps further off, for digital downloads of books.

Amazon is already involved in a new technology for book publishing. It owns a print-on- demand service called Booksurge. Currently this is an option for self-publishing authors, but Amazon hopes to sell its printing service to mainstream publishers.

Under the print-on-demand model, the author uploads a digital manuscript to Booksurge. A paper copy is printed from the digital file only when a customer buys one. It’s a reminder that these days paper books have their digital shadows sitting on the publisher’s computer. The gap between the two media is closer than we often remember.

Soon, a large online retailer, whether it’s Amazon, iTunes, or another business, will be a repository of digital books, video, and music. It’s only a short step to inter-mesh related products together into multimedia packages. You can envisage a digital book that, instead of an illustration, has a short video on the page. It’s possible that you might be reading this off an eye-friendly screen that you can fold into your pocket. But given that many people still love the aesthetics of physical paper, the vision becomes even more intriguing when one of the elements in the package is paper containing live hyperlinks.