Blockbuster did pivot though. They went out of business before streaming took off, but they had their own mail order DVD service, and it was pretty damn good. Being able to drop off in store to get the next set of discs shipped out immediately was a killer feature, when it worked! Often times I'd drop discs off but they'd show up as "unreturned" for a few days, basically putting their service on bar with Netflix's mail order business.

Being able to get the DVD extras, and director's cut editions of movies, as a huge advantage of physical discs. And of course the huge, one stop, selection. I currently have 2 VOD subscriptions and often still have to pay extra for quality movie rentals.