"consumer demand is clearly moving to digital distribution of video entertainment,"Yeah, it isn't "moving" it has "moved". What he fails to realize is that the movement is also away from cable and satellite providers such as DISH (the parent company of Blockbuster) as well. Roku and Apple TV products are letting people completely unhook.
Our household unplugged our DiSH a little over a year ago, and now instead of seeing what is on or recorded, we get to flip through a broad menu of options to choose from - want to watch the entire series of The Walking Dead in a single day? No problem, you can watch the first three seasons on the Amazon Prime channel for FREE (this channel is free if you already have Amazon Prime, which we do for other reasons) or on NetFlix which costs $7.99/mo, the current season costs around $15 or you can wait til post-season and its free too. Want to watch virtually any sitcom - Hulu, free. We spend around $40 per month now on streaming TV, mostly for premium content (i.e. HuluPLUS - $7.99/mo, more episodes are available with Plus; Netflix) and movies on demand (even ones in the theatre right now). Movies on demand that are out on Redbox (which has a channel on Roku) are a $1-2 more than at the physical location, but you spend multiples of that in time and gas, so net savings - plus many of those movies are also on other channels for free.
Sorry for the mission creep. Most of the Blockbuster stores that are closing are small corner retail stores and outparcel units in strip centers. Some common uses that have popped up since the bankruptcy has been pawn shops (i.e. LaFamilia in FL), cell phone retailers (for half, or less, the footprint), Game Stops, medical (i.e. freestanding emergency rooms, minute clinics, etc.), and restaurants. There is a blogger in Atlanta who has documented many of the stores' transitions there that is worth a quick peek.