Tech-dumb Meltha is dumb

All right, I'm going to ask a truly weird question, one that probably has a really obvious answer, but I'm not getting it.

People are switching their DVD and music collections (and photos?) to digital, apparently for lots of reasons but at least in part because digital doesn't get scratched/degrade/whatever. Okay, I get that, but where the heck do you store digital files? Won't that essentially fill a hard drive in like 10 or so movies? And wouldn't you lose everything if the computer went belly up? Or is this that whole "cloud computing" thing I'm hearing about, whatever the heck that is?

I miss VCRs. And you kids get off my grass or I'm keeping your baseball.