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.
"More software projects have gone awry for lack of calendar time than for all other causes combined." -- Fred Brooks, Jr., _The Mythical Man Month_