Yes, the retail rental market is plunging and has tons of fixed costs. The online retail market is surging and much higher profit potential (no retail space, much much fewer employees, etc). Additionally the fixed costs for the online rental market are dropping, namely servers and bandwidth, but also the hardware to make set top box devices.

What's so good about Blockbuster that I'm going to get off my couch and drive to a store if I can get the same product instantly with little more that moving my remote? They have a serious problem looming.