Last week, amid investor excitement about Netflix Inc.'s move to conquer streaming video, Blockbuster Inc. put out a release of its own. It was about its new ad campaign -- "Less Waiting. More Watching" -- designed to reinforce the 28-day advantage that the bankrupt company still commands for major releases from major studios.

Although little noticed by many, the campaign offers up big reminders for a discerning few. Yes, there is that 28-day advantage. But there's also Blockbuster's long-standing relationships with Hollywood's film factories, which remain strong enough to have secured the advantage in the first place.

Equally important is that, in launching its first ad campaign since 2007, Blockbuster is signaling there's life in the old-fashioned video renter yet. And given its brand recognition, which outstrips its competitors, there may even be takeover interest once this leading name turns the page on Chapter 11 early next year.

This doesn't deny the conviction of investors who believe the contest for home entertainment dominance is, clearly, Netflix's to lose. Just look at the relative upstart's market capitalization of nearly $10 billion, its trailing price-to-equity ratio of 71 and a 52-week stock price gain of almost 200%.

Its video-streaming leadership has many believing Netflix's stock price of nearly $200 per share will further distance itself from Blockbuster's bankrupt price of a nickel per share. Consider this take from Credit Suisse Group on the day Netflix announced a $7.99 a month subscription plan for customers content just to stream movies and television shows rather than to conduct such commerce through the mails: "We believe NFLX streaming offering is compelling and should improve as NFLX acquires more content. In turn, this is creating a virtuous cycle whereby NFLX [subscription] base grows, leading to greater financial resources to acquire more content to improve the user experience and grow the sub footprint."

The problem here has to do with the owners of content Netflix wants to acquire. They may not want to sell. Or, more precisely, they may not want to license it to a company already generating $2 billion in annual sales by repurposing their creations. And if they don't want to license it, there's nothing Netflix can do.

As it admits in its most recent 10-K: "If the studios and distributors change their terms and conditions or are no longer willing or able to provide us licenses, our ability to stream content to our subscribers will be adversely affected. Unlike DVD, streaming content is not subject to the First Sale Doctrine." This doctrine has allowed Netflix and others, if only as a last resort, to buy lawfully made copies of copyrighted works such as DVDs after their "first sale."

The company whose video-streaming crown is its to lose then lets loose with information that should probably be classified for its potential to abuse. Netflix not only admits its complete dependence on studios for "licenses in order to access and stream content" but acknowledges those licenses can be immediately revoked. "In December 2008," the 10-K offers as an example, "certain content associated with our license from the Starz Play service was withdrawn on short notice."

But who besides Starz Play, a pay-TV channel owned by perennially pesky Liberty Media Corp., would entertain such a notion? Which studio would forsake the "found money" Netflix provides in exchange for stopping the video streamer's juggernaut? The answer is all of them -- all of them as a Netflix-owning cooperative that's structured as a legal cartel.

Netflix's transition to studio ownership could even be orderly. That is, in exchange for giving away a series of ownership stakes, Netflix could obtain the right to stream studio libraries over a corresponding series of intervals. It could also assume a United Nations-like role, keeping studios at peace with one another and satisfying antitrust concerns by opening up membership to exhibitors and others wary of the consortium's monopolistic tendencies.

If Netflix won't play this role, it's easy to reckon where the studios would turn. They're obviously aware that Hulu LLC, whose strategic owners already include NBC Universal Inc., News Corp. and the Walt Disney Co., shows similar promise. But so does Blockbuster, and the timing couldn't be better.

In fact, on emerging from bankruptcy, the company could be acquired for a fraction of the price of others. Yet its infrastructure as "a multi-channel entertainment provider of movies," according to the release announcing its ad campaign, might even be more suitable. And if a deal does go through, Blockbuster and its new studio owners could resurrect a theme from the 1990s for an American institution otherwise relegated to the cutting-room floor: "Win in a Flash."

See the complete archives of Backstory

Richard Morgan covers media for The Deal magazine.