When does the tangible become irrelevant?

The other night, I was standing at a local coffee shop with my friend, Matt, and glanced behind me through the window and noticed a video store. I wasn't surprised to see 3 guys standing at the counter looking bored out of their minds.

"You know, I wonder when these Blockbuster/Hollywood Video places will realize that their business models are becoming irrelevant." I stated plainly.

"I think they make a lot of money off things like video game rentals, though."

"Yeah, but there are services that let you download and play games or that will send you them by mail."

"True; I think Netflix just bought one of those game services, too."

With so many knowledgeable-enough consumers on the internet and the number of cheaper online alternatives to brick-and-mortar stores, how long will it be before walk in stores either disappear or dwindle down to the bigger box Walmart/Costcos?

We are already seeing it with places like music and electronics stores (like the recent news about Circuit City) - eventually these stores are going to stay in business purely for the need-it-right-now customers and the customers that need to be educated on the products. Radioshack was once a big force in it's market - their presence in the market is less noticeable now and people are seeing less use for them when they can get everything at places like Walmart and Costco.