I think Netflix is going to become hugely popular very soon. I just returned from a biz trip to Florida and on my hell flight full of kid's screaming there was a woman sitting behind me who would not shut up for the entire trip. I had to smile when her topic turned to Netflix though. She was raving about the service and telling the guy next to her how it works and how convenient it is. Word of mouth is the best (and cheapest) form of advertising.
Blockbuster is despised because they screwed their customers with late fees. People don't want to give their business to companies like that.
I agree with Word of Mouth - I keep telling people on this board that Netflix is more like a cult!. . .people get "converted" and preach to their friends. . .that is how I got started years ago. . .I told people at work, and now they signed up and have told family members around the country. . .