Personally, I think the answer might be a hybrid situation. EG. Offer physical DVD rentals out of an existing establishment that's already successful on its own - like a gas station, bar or grocery store.
So Redbox machines, basically? I see quite a few of them around here.
Humanity has the stars in its future, and that future is too important to be lost under the burden of juvenile folly and ignorant superstition. - Isaac Asimov