I recently moved quite close to Movie Madness here in Portland, Oregon. As the movie rental business has slowly disintegrated this past decade or so, this place has paradoxically thrived. Some of that has to do with the strength and eclectic nature of their catalog — they have some very rare things, out of print things, foreign things, bizarre things and things that are some amalgamation of all those things I just mentioned (They also used to have a LaserDisc section. I didn't notice it the last time I was in there but I have to think they're still around somewhere.).
But I think another factor has to be the physical store itself. It's like a free museum of movie memorabilia that's constantly being added to. Want to see the knife from Psycho? A promotional bar of soap from Fight Club? Ingred Bergman's chair from Casablanca? Or one of the heads from Aliens? it's all there on display, interspersed in a way that makes you want to explore the store in its entirety... And while you're there, hey, why not rent a movie, right?
There's some kind of lesson to be taken from this business model, I think, though I'm not entirely sure what.