I love netflix, I also have been really happy with their netflix streaming service... If netflix keeps leading the way I doubt the movie industry will end up as screwed as the music industry.
My wife and I just traded in our cable subscription ($65/month) for Netflix ($12/month) + XBox 360 for tv streaming ($299) and let's face it, XBox 360 duties as well. Streaming from a USB hard drive (already owned). Plus Christmas gifts basically covered the XBox.
One month in, no regrets.
I don't think the video industry is "dead", but it sure is in for an upheaval.
Netflix's streaming library is "meh", but if you have Netflix streaming be sure to poke into the "Starz" library; they seem to have to keep it visually separate for legal reasons and it has a surprising amount of moderately good/recent stuff in it. If you see reviews from before the Starz edition, it's certainly gotten less meh since then.
I would characterize the Netflix streaming library as: If you have a specific video in mind and you want to know if it can be streamed, the answer is "no". If you want to stream a video and you wonder if there's something good worth streaming, the answer is "yes". That's actually progress, all things considered.
Now, if either Netflix or Microsoft (XBox 360) cut a deal with Hulu, I'm set. And I expect the odds of at least one of those occurring in six months to be better than 50/50.
I have the Apple TV and have cancelled cable as well. Greatest thing about Apple TV is that my wife and her sister - neither of whom have any patience for futzing around with AV or computer equipment - can easily figure everything out and happily watch TV/movies whenever they want. Also, LOVE watching podcasts on a normal TV and being able to control music playback in the living room via my phone. Video podcasts have replaced the time I used to spend randomly flipping through channels.
I think the only thing that's really missing from my current experience is an easy way to stream live video to my Apple TV (without breaking the simple interface). It was a bit of an issue during the election. I would have paid to have had access to a CNN or some other news channel other than one of the broadcast networks, though PBS served us reasonably well.
I have a Blockbuster Online subscription and love it. When I decided I wanted a movie service I went looking at both offerings and I ended up deciding on BB because of the in-store exchanges. I'm willing to bet I'd be on Netflix if I lived in a bigger city that didn't involve me driving past a blockbuster on my way to work every day. With Blockbuster for movies and Hulu for TV, I just throw away all those Time Warner ads I get in the mail trying to get me to bundle my internet.
if you are into netflix, hulu, and other streaming stuff (nbc,cnn,etc) I highly recommend checking out boxee, http://boxee.tv/ it has a great user interface and works with the apple remote.
I had a Mac Mini sitting around so I threw Boxee and that takes care of everything I need. I actually had canceled my Netflix account and Boxee convinced me to set it up again since I can stream instant movies from there. It's awesome.
Perhaps as the economy goes down the toilet, people shift their entertainment dollars to Netflix as it is one of the cheapest forms of entertainment available. I wonder if Netflix and Walmart are positively correlated :)
