Shifting consumer preferences strike again. This time, it's the movie rental industry that is feeling the blow. Movie Gallery, the owner of the Hollywood Video rental stores has officially filed for bankruptcy protection under Chapter 11 of the Bankruptcy Code.

Movie Gallery operates the second-largest video rental chain in North America, the first being Blockbuster Inc (BBI). Blockbuster, too, has been suffering greatly in the advent of newer, more efficient movie-rental companies.

In fact, the efficiency and cost-effectiveness of some of Movie Gallery's and Blockbuster's competitors could be the driving force behind the demise of these movie giants

Take, for example, the Netflix (NFLX) model. Netflix allows members to rent movies online. The members then receive their movie in the mail. Coinstar (CSTR) is another large player in the movie-rental space. It places kiosks in various grocery stores and allows renters both simplicity and affordability.

Finally, there is the availability of streaming content online, available legally and illegally.

In light of all the competition movie rental companies face, it's no wonder that the second largest movie chain is filing for bankruptcy, especially when the largest chain has been rumored to be failing for the past decade.

Although many companies remain open and simply re-organize in the midst of a Chapter 11 filing, Movie Gallery will reportedly be closing a large number of stores, in an attempt to appease creditors. The movie chain will close six stores in the San Diego area alone. Bankruptcy attorneys generally help companies structure their reorganization plan to gain the approval of creditors. San Diego bankruptcy attorneys have certainly had their work cut out for them in this economy, given the county's economic death-toll.

Blockbuster's fate is yet to be determined in the wake of this bankruptcy. Will the movie giant rise or will it, too, crumble under the weight of its competitors?