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The shift from retail storefronts (expensive -- storefront rental fees, employee and manager costs) to DVDs in the mail (less expensive -- warehouse automation, employee and manager costs) to VOD (cheap -- bandwidth and technical employee costs) is how things will continue to migrate.

Even the $1 RedBox rentals have their days numbered because the MPAA wants better control over copy protection. It takes me just minutes to copy a DVD, but unless I exploit the "analog hole", I can't easily "rip" a movie off VOD.

-Aaron-
 
One thing they do to differentiate themselves from Netflix is tie the service into their stores, so you can return things at a retail location and your next film gets shipped right out instead of waiting for it to get back to them in the mail. I think they also offer a select number of in-store rentals, depending on which plan you have.

And the in-store rentals were really the only thing that differentiated Blockbuster from Netflix, and if they start closing retail stores, that will soon be gone, and eventually I think BB Online will go with it. Blockbuster has the name recognition for in-store rental, but when it comes to rent by mail, Netflix is king.

Come to think of it, I'm not sure if I've seen a BBO TV commercial lately. I see Netflix ads all the time. Perhaps they need to increase the advertising budget.
 
My wife and I hung on to Blockbuster as long as we could, mainly because it was convenient to exchange a mailed DVD for another movie at a brick and mortar store without having to wait. But Netflix did the online thing, and while Blockbuster did as well, theirs wasn't Mac compatible. That's what ended up causing us to switch. This was back in February or so.
 
Blockbuster may shrink in size but they are not going to go out of business. Many companies have been in a similar situation and have gone on to succeed.

Blockbuster is better than Netflix, overall. I have no doubt that they will survive.

Blockbuster may survive but they won't be a relevant as they once were and honestly if they do survive i can't see blockbuster being around past 2017 if even that long.

Video stores are a dying breed pretty much just like FYE will go under and just as Tower Records,Sam goody etc have.

I knew blockbuster jumped the shark when the one around my house started selling books.
 
Blockbuster is better than Netflix, overall. I have no doubt that they will survive.

I stopped renting from Blockbuster because they NEVER had what I wanted to watch; the local mom & pop rental places had a better selection than BB, and better prices. Netflix gives me better selection for better prices, particularly with what they have online. And really, if I didn't watch a movie in the theatre when it came out, what's another month or 2 for Netflix to get it?
 
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