Will Redbox and Netflix be the downfall of Blockbuster?

Specifically, will two complementary upshot media companies (Netflix (www.netflix.com) and Redbox (www.redbox.com) (and they both have red logos)) combine to effectively take down the 800 pound gorilla of videos? Or will Blockbuster continue to innovate to attract and retain customers?

The history (as I see it)
With the advent of the VCR, came the video rental store. Originally, these stores were locally owned, but like most industries, national chains applied economies of scale and marketing to take the lead in the rental industry. Blockbuster has over time emerged as the dominant player, outlasting both local and other national chains to become effectively the only brick-and-mortar rental store remaining.

Several years back, netflix started to pickup up a significant following with their DVD's by mail offerings and the competition was on. Blockbuster countered with a DVD by mail service of their own. (as did Walmart, although Walmart was not successful). Blockbuster even one-upped Netflix by capitalizing on their local presence and allowing you to return your DVD by mail to the local store for a free rental. In an effort to counter the local presence of Blockbuster's brick-and-motar business model, Netflix introduced the Watch Now feature with streaming movies. This is a neat technology, but cannot replicate the viewing experience most people want.

Enter Redbox. A DVD rental kiosk (a big red box the size of a soda machine) that provides recent releases for $1 per night ... No membership ... No due dates. Redbox kiosks can be found in increasing numbers at supermarkers and fastfood restaurants.

So my question. ... Can blockbuster continue to be successful in an environment where Netflix can provide access to any recording available in the DVD format, and Redbox can satisfy the instant gratification of running out and picking up a video?

I would like to hear from you is what do you use and why?