Some strange things have been happening where I live regarding the whole Netflix debacle. First off, Blockbuster has been bought out by a new company (Comcast), and they are actually opening up stores again as well as putting in kiosks in 7-11 stores, so Blockbuster seems to be coming back to life.
Netflix, on the other hand, just fumbled one of their main film providers, Starz, which provided about 80% of the newer films on the service. They signed a deal with a new cable channel, Epix, which holds many Paramount films like the Iron Man movies, and likely Thor will appear soon, and they recently made a deal with Dreamworks Animation for exclusivity starting in 2013.
Netflix seems to want to be an alternative to cable, so they are focusing on producing new originals. The big news story is that they will show original episodes of the show Arrested Development in 2013. The main problem is, 2013 is looking like a good year for new programming, but at the cost of 2012 which will see a large drop in programming. On top of that, fiber optics are becoming more widely available, data caps are being slapped into place, and the option of using streaming to replace cable/satellite/fiber optics threatens to blow over those caps and lead to terribly high Internet bills, deterring customers from using streaming services.
To top everything off here, Netflix decided to announce higher prices at the same time they announced their content was getting cut, so that angered customers as well. In short, they scared cable providers into action, cable providers enticed Showtime and Starz to stay with them and pull their programming from Netflix, (it seems likely many other providers will eventually follow) they scared the phone companies with their perceived threat to fiber optics, and the phone companies responded by putting on data caps.
Netflix tried to be heroes and take on the big guys, but the big guys had plenty of weapons up their sleeves to fight back. I hope Netflix survives this (and they probably will) but they've been taking serious blows lately. Still, there are many good TV shows (Whole Star Trek/STNG series along with the spinoffs of those series- good by me) and a lot of FX shows. Also, for Anime fans, they have an incredible selection. For new mainstream films, though, they are not doing well.