The customer experience at blockbuster stores is so negative that it makes absolutely no difference whether their prices are better than Netflix. Even with free rentals, I just don't need a movie bad enough to subject myself to the Neanderthal staff.
On the opposite end, Netflix gets it right, from super easy online ordering to nice customer service. Why wouldn't people be loyal to them?
Blockbuster's problems are too big to be solved by little holiday promotions. They have let themselves become a "ghetto" store, and once you go ghetto, the good people up and leave and never look back.