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I think the author chose a poor title for the article. The continuing shrinkage of Blockbuster is just a continuing reinforcement of the fact that DVD sales and rentals will decrease as digital downloads and streaming continue their growth. If anything this is confirmation that the end is a lot closer than the begining.

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From the article:

"DVDs are going away. This already happened with music. One day that vast majority of us will no longer buy physical copies of movies and keep them on a shelf. Netflix realizes this - which is exactly why they want to get out of the expensive rent-by-mail business and completely focus their efforts online with streaming content."

I perceive NetFlix's DVD-by-mail strategy as an ingenious hack to get market penetration into a market which required eventual movement by large entities -- (1) the telcoms to provide sufficient bandwidth to consumers and (2) the studios to allow their content to be streamed. It was obvious that #1 and #2 would have to happen eventually, but only a fool would have built a business whose success was contingent on the timing of these changes. Brilliant.

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