What happened to Blockbuster?

I grew up in the 90's and I got a chance to know the stereotypical video rental store.  I remember the small stores in the small town that I grew up in.  You could rent a video, but candy, rent a nintendo game, and even buy movies or video games. 
    Just in case you haven't noticed lately, the neighborhood video store is becoming extinct.  I see blockbuster videos closing regularly in my town.  I have been to four video store liquidation sales.  Why is the video store disappering?
    The first answer is the invention of the DVD.  This ushered in a new, much smaller medium for home movies.  The DVD can be shipped cheaply, and can be stored  in bulk in a much smaller space than the VHS.
    The other answer is Netflix and Redbox.  I personally started to catch on to redbox first, and was excited to pay one dollar for a DVD rental.  The one in my neighborhood store has a line every evening, and seems extremely busy.  I knew that Redbox was going to be huge once McDonald's bought the company. 
    Netflix took the video rental industry by storm.  It is this innovation and creativity that makes our country great.  Renting movies, and watching endless movies for one low monthly fee. 
    Well, goodbye to the video store.  There are still some video stores, but they are disappearing.  How can they compete?