The streaming is close - it's incredibly convient, it's great when the movies are in store, but the quality is still questionable due to issues around silverlight and the general questionable nature of the US internet infrastructure - mostly a last mile issue I suppose. I had to stop by a client's house two weeks ago - I usually don't make house calls and tend to focus on corporate gigs, but she - a lawyer in her mid 40s - pays the bills - to help her with setting up her Netflix streaming on her internet enabled TV. She's able to use and can afford the internet enabled TV, but I doubt that she was savy enough to use a computer hooked to a TV. I suspect when more televisions come internet enabled, then we will truly see the demand for streaming services take off. I'd be curious to see what Netflix's marketing researched showed - assuming that they did any - around perceptions of their brand and the challenges and ease of use of around streaming service. I'm also curious if they have any marketing consultants involved and what their guidance was.
I really don't think the decision to ditch DVDs was about consumers at all. I think it was all about getting into position to battle over streaming rights. Hell, even the Academy has started streaming their screeners...
Other than that, I was always disappointed that their entire catalog wasn't available for streaming. Has this changed?