This digital entertainment analysis reminds us that half the world isn't online, which can present interesting opportunities.

Robert X. Cringely, one of our favorite tech analysts, sees offline as the only major growth path for Apple. He pairs that with one major national entertainment store chain that is in dire need of resuscitation.

He writes in part:

The problems at Blockbuster are simple. The company has high inventory and real estate costs compared to either NetFlix's super-efficient rent-by-mail operation or to just about any of the many emerging digital Distribution plans. Having that Blockbuster shop just down the road used to be a huge advantage for the chain, providing easy proximity to viewers. But NetFlix comes straight to your house and even though Blockbuster now runs its own NetFlix-type service, those stores aren't (yet) going away, so it can never have NetFlix-like efficiency.

For a year now I have been writing that Apple is aiming to build a video distribution empire to match its existing music distribution empire. We've seen some of this take place, too, with Apple claiming to have distributed more than 12 million music videos, TV episodes, and motion pictures through the iTunes Music Store. Down the line we'll see Video iPods with larger screens, the Video Express wireless access point-cum-H.264 decoder, faster Mac Minis with larger disk drives, and whole new versions of Apple's seminal Front Row home theater application. As soon as Steve Jobs can sort out his legal problem with little Burst.com and finish signing every movie and TV studio to an electronic distribution deal, we'll see lots more announcements from Apple.

Apple has learned a lot from its own stores about the value of a local retail presence. But there aren't enough Apple stores to support an iPod-based video food chain. Hence the need for a host like Blockbuster, which would gladly assume all the financial risk once exposed to Steve Jobs' reality distortion field.