As someone who grew up with Blockbuster but now have become a hacker, I'm torn between the old fashioned enjoyment of getting out of the house to rent movies, and the efficiency of online services like Netflix and Hulu.
There are a few perks with the store as well. The lady that runs it lets me get away with murder on returning movies late. There's a vast selection. Older movies (6 months+) are $1, and the rental lasts a week. For movies not available through Netflix and Prime, that deal kills the rental cost + term from the digital competition (as an example, I Am Legend is $1.99 on Amazon to rent for 24 hours). So in my household, I can watch the movie today, another person can watch it several days later; that nicely beats what Amazon & Co offer me.
Overall I find the store to be a positive experience, I'm glad it still exists.
For new movies they use a revenue sharing agreement, and they own the older movies.