Blockbuster went out of business because they made the video rental market incredibly boring and had no vision for the future. Once they got market dominance it became just 500 copies of the first fast and furious as a guaranteed rental, and all the cool and interesting stuff gone.
Observationally, their model was roughly like this:
* For hit movies buy an obscene number of copies to rent month 1
* Sell off some for a discount as the rentals dwindled
* Discount anything over a reasonable backlog / duplicates set shortly after
Offhand I think they tried to time this to end well enough before the release windows slid to TV + Ads distribution.
* Rent the backlog until dead or until they sold in a discount bin
Some independent shops also competed. I recall my parents kindly rented a few less popular games they happened to carry. Not sure about videos, might have been better for stuff not mainstream enough at the big national chain.
