To answer your question, yeah, video stores in my area are dying and almost gone, although Blockbuster is still out there. I think they are about to fold up shop as well.
On the other hand, Netflix seems to be fucking everywhere and whenever I go to the grocery store I keep seeing these fuckers everywhere:
If not that particular brand, its red and rents DVD's.
So stores are dead/dying, but rentals appear to be doing just fine.
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Darrah Ford's family video archives - Father's Day, 1996: