The original filmed footage (generation one) - master tape (gen 2) - copy master (gen 3) - your personal copy (gen 4) - a copy of your tape you made for a friend (gen 5) - and so on down the line.
Production studios want to try to eliminate the number of generations that a movie goes through before it gets out to the public because, as was the case with VHS, with each generation you tend to lose image and sound quality. VHS suffers from a medium malady known as magnetic fallout. When a VHS tape is made, all that is happening is that the magnetic heads in a recorder are reorganizing magnetic particles that are attached to the magnetic tape in a cartridge. However, the process of reorganizing these particles is never 100%. So, with each generation, let's just assume for the sake of argument that it's only a 95% accuracy in reorganization. By the time we get to the consumer copy, if there are in fact four generations, our copy has 80% of the A/V quality of the original filmed footage. Digital media does help with this as there is much greater accuracy in making copies of A/V information that uses 1's and 0's than that which uses magnetism. But, there is sometimes a much richer feel to the magnetic versions. It's what we've become accustomed to. You've gotta admit that even though the sound and picture in AOTC were much crisper (being filmed in digital), it just felt "different". You may not know exactly why it was different, but it was. It was the same argument that fans of vinyl make... vinyl, being an analog medium instead of CD's digital medium, is richer and doesn't sound as clean and overproduced. Some people like the cleanliness of the digital format, others don't, many more just don't care.
I may be off on how many gens there are in the process, but this is the best I could do on such short notice.
Hope this helps.