Read it from a Fastcompany. They did take big a bite of NFLX customer base. Not too rosy, but I wouldn't count them out.
"Blockbuster Online, which launched last August, is growing quickly. Although the me-too service isn't yet profitable--and its corporate parent is badly ailing, losing $57 million in the second quarter--it added about the same number of subscribers as Netflix during the second quarter. Blockbuster gives away free in-store rental coupons, has begun using its stores as mini distribution centers, and is rolling out its own recommendation engine. A site redesign is planned for early 2006, and the company is looking into community features that may connect friends and family.
Even though Wal-Mart is out of the picture, Amazon could still enter the market, too. And as the game shifts to video on demand in the coming years, Netflix's competition will change again."
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