Applications of magnetic thin films in data storage technology and areas for future research on thin films are discussed. Recent work at various laboratories indicates that magnetic recording densities of at least two orders of magnitude greater than those of today will be achieved. Among the advances in thin film technology which are needed to make this possible are the following: improved wear resistant overcoats for magnetic media; higher coercivity thin film media with isolated grain structure and multilayers to achieve low noise; high magnetization, high permeability multilayer thin film materials for advanced recording heads; giant magnetoresistive materials for advanced read heads. Although magnetic recording is expected to continue to dominate the data storage industry for the next two decades, magnetic-optic recording is likely to play an increasingly large role as a removable storage medium for large files of data involving images and multimedia. For increased storage density in magneto-optic recording, new magneto-optic thin film materials which are sensitive in the blue (or shorter) wavelength spectrum are needed. These films must not only provide large magneto-optic coefficients, but must also have the proper microstructure so that noise is low during readback. In order for these advances to be possible, new materials, new processing techniques, improved models and improved resolution imaging systems for studying both the magnetic and physical microstructure of thin films are needed.