The article is from WSJ on Feb 10, 2011 http://online.wsj.com/article/SB10001424052748704422204576130312463129144.html?mod=WSJ_Tech_LEFTTopNews
Netflix definitely pushed several competitors out of business but in this article, Mr. Skorman, an Internet and retail entrepreneur, "believes rental stores with loyal followings in vibrant neighborhoods will survive.", citing that people still need "community element" that online can't offer.
Notice that there are at least two conditions for the brick-and-mortar model to survive: loyalists and vibrant neighborhoods. So, this model can work but only as highly specialized boutiques located in some crowded areas due to the two dramatic limitations that Chris Anderson pointed put in "The Long Tail".