Netflix is still thinking that downloading and viewing online is the future, they don't seem to get the fact that people like owning something real and not some downloaded thing that the company can come back and delete.
Downloading and viewing online is
the future. You're attached to physical media for now, but already the children of the current generation are already getting comfortable with it. Millions of computer users play a game that only works if you play it online (World of Warcraft) and pay a monthly subscription to play a game that they already paid $40-$60 to "own" even though the discs would be useless if the servers died. Sure, other people can start a private server, but even so, you have to have a server side to play the game. 10 years ago, people would have laughed at you for making such a "foolish purchase", but today, there are 13 million gamers who disagree.
To add to that, you don't even have to have the physical media anymore. You can have it installed to your PC from Blizzard's servers. It just installs, debits the $40-$60 from your account and you play. All for roughly $15 a month. Nowhere in the transaction did you ever even touch a single CD or DVD.