Brick-and-mortar stores are what people are used to -- people feel nostalgic about them. But given the fall of giants like Blockbuster, burdened by expensive lease contracts, it's clear that consumers are moving on to lower prices; greater selection; and most important, availability and ease of use. But don't forget staff. Customized recommendation systems simply cannot replace interacting with another person who uses far more criteria by which to judge content. The only problem is that if you prefer to pick out your own movies, you're being up-charged for essentially nothing.
Video games are a clear advantage for video rental stores. Content delivery systems either specialize in video games or videos, but video rental stores offer both. Even as rental fees on video games increased as video rental stores lost revenue to other content delivery systems, video game rentals were still much cheaper than purchasing for gamers who finish games in a matter of days. Gamers still use video rental stores for this reason, but now gamers also use services that rent and deliver video games via mail, like the Netflix model. Gamers can rent as many games as they can play for a small fee. The only drawback is that inventory might be low for certain games.
Price is the biggest disadvantage for video rental stores. Rent alone removes their competitive edge, not to mention labor, which even at minimum wage is quite expensive, particularly if you consider the customers who only need the staff to swipe their credit card and place the DVD or video game into the case. Additionally, late fees top the list of consumer complaints against video rental stores. In response, some video rental stores have increased the rental time.
Selection is a disadvantage for video rental stores. Shelf space is finite while Internet and pay-per-view databases are infinite. Video rental stores do however have the edge over movie rental machines in terms of capacity. Unfortunately, the majority of products sold at a video rental store are made up of the most popular, most recent releases, which are all movie rental machines stock. The emergence of Blockbuster video rental machines as an answer to Red Box machines is proof that even in this sector, video rental stores can only compete in terms of market share.