Blockbuster caused a flutter when it announced a billion-dollar bid last month to buy rival Hollywood Entertainment, and rental chain Movie Gallery Inc. followed up with a bid of its own. What was puzzling, however, was the rationale that inspired Blockbuster's proposal. Online subscription services like Netflix, along with DVD sales and video-on-demand services, have eaten into the company's income. Its rental revenues have declined each quarter this year compared with last. Blockbuster has responded by investing in video-game rentals and launching its own online subscription service. It's "surprising that Blockbuster would choose to spend so much reinforcing its presence in...
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