Ken Auletta is the best at walking the layman through the mine fields of our changing media scene. This is from his Outside the Box: Netflix and the future of television in the current issue of The New Yorker:
"Hastings [Reed Hastings, CEO of Netfix] has succeeded, in large part, by taking advantage of what he calls viewers' "managed dissatisfaction" with traditional television: each hour of programming is crammed with about twenty minutes of commercials and promotional messages for other shows. Netfix carries no commercials; its revenue drives entirely from subscription fees. Viewers are happy to pay a set fee, now eight dollars a month, in order to watch, uninterrupted, their choice of films or shows, whenever they want, on whatever device they want."
Hastings saw the future of television as more like a book - you control a book and timing of reading much differently than an episode of the Simpsons.
The article pointed out that Blockbuster should also get the Kodak-What-Was-I-Thinking Award. In 2000 Netflix offered to sell a 49% stake to Blockbuster.