My physical discs are my ultimate "backup", also proof of purchase if for some reason in the future sharing my server with a FEW friends and family becomes problematic. I had the same issue with storage and at first went with binders and keeping the cover art but am now at the point of just buying disc spindles and throwing any new discs onto them as even the binders are too bulky for me (I have 4 200 disc binders currently which contains about 500 movie/TV series discs and about 300 CDs.)