For Netflix and the movie rental industry, streaming is the future, and mailing discs around the country in envelopes is not. This isn't just based on a hunch -- it's based on real people signing up for new Netflix accounts.
Netflix has a good business model and has been well-run in the past. Perhaps they will recognize that as their market gets competitive, they will need to offer more, not less, in order to be the most competitive.
To reach customers directly, studios will have to build new businesses to distribute movies and leverage behavioral data. Which means Hollywood must compete with the best-in-class e-retailers like Amazon and Apple.