I always thought it was digital. The only problem being, your tv can't play digital ( or at least during those early days) so each LD players come with a DAC unit that convert the digital data/signal to analogue which is then output via video RCA cable to your TV.
I only saw some second hand ones at those "cash for your stuff" centre. My Sony player broke down about a few years back. I have like 50 LDs which I kinda hope I can get to watch again man...my Batman movies are all there!!!