Comment selection at video stores better than Netflix (Score 1) 547
Look at top-film lists for any genre or time-period and then see which of those are available on Netflix (streaming). It's less than 1 in 10. Then look at new releases. Very few are available on Netflix for download. Selection is a big divider for Netflix and brick/mortars. These two areas (popular/classic favorites and new releases) are Netflix weaknesses that are local video store strengths. Hang on to these and try to do them well.
Common weaknesses are general selection. The fact is there are millions of movies out there, and not even Netflix can offer all of them. I'd really like to see all the films of Francois Truffaut, for example, but you can't on Netflix. You also can't at your local video store. But this is where I like what another slashdot commentor said: let the user sponsor the dvd. I think they said through buy-back, which is a good option if the store wants the disc, but if not, I'd also let them purchase the dvd and share in any profits from rentals and let them own the disc after a time if no one's renting it.
One area where video rentals could have innovated 10 years ago but are still resisting is in video research. Put up a kiosk in your store where people can do movie research and that shows them whether the movie they want is available (for rent, and whether currently in-stock) in your store. Put this online too, so people can look it up before they drive all the way to your store. You already have computerized systems that tell the store the same info, so it can't be too hard to make it available to the customers. Even Netflix is squandering this possibility, especially since they split the dvd and streaming business lines. Now when you search for a movie that is not in their streaming-only system, it doesn't show you the title and say 'sorry-not available for streaming' or give you the option to rent-by-mail, it actually suggests totally different movies, making you think you entered the wrong title or something. And while you're at it, give the users a flat-screen tv to watch movie trailers on while they're there.
There are ways for brick/mortar's to survivce for a bit longer, but I give dvd/hd rental companies 3-5 years max, for the ones that really try to hang on. The ideas I've given above are areas where locals can offer big advantages over digital streaming services, but those wrinkles will be ironed out soon enough in streaming. I guess then you could try to target poor areas where the net isn't ubiquitous. Long-term, perhaps there is a way to take advantage of the meat-space aspect of local stores, but I can't think of any, except for the general fostering of community. Sorry I can't help in this area, but if you want to survive long-term, it's got to be in the community--something that puts customers face-to-face and interacting in a fun way.