I personally doubt the longevity of Netflix. On it's own it's not much more than a cable channel, like say AMC. Its success depends on producing very good content... it has not mastered this at all. Over time most studios will back out of their deals with it.
This is not necessarily true. Even moderately good content, catering to a specific audience will suffice.
IIRC, NF has loads of user data and behavioural data to help it guide in production.
Assuming an average, not fully satisfied consumer subscribes to NF for 1 year, that's 120 $ per consumer.
Assume a show that takes 100 million to produce, say 3 seasons. To make the production break-even, NF will need around 840000 paying subscribers (currently it has around 125 million subscribers, so about 0.672% of its total subscriber base) , who don't even have to watch it in the first place. Now that's a very small number compared to the amount of paying subscribers currently on it's platform.
To me it seems to be a very profitable model, at least for 10 - 15 years from now.
Edit : Updated the math.
Edit 2 :
An average episode costs between 3 - 5 million. Lets take 5 million as the cost per episode. With 125 million subscribers paying 120 $ per year, Netflix can produce 3000 episodes. That's just for 1 year. Also, in India, many shows cost way less than 5 million USD. But I have seen NF splurge of shows (it is hiring top notch actors in India for it's shows, where traditionally and culturally, a movie star playing in a "TV" series usually means an end-of-career move, so it's a big thing to work on a NF show here in India)
It's 0.672 %.
Updated my answer.
This is incredibly subjective. They've definitely shown they can produce such content. They had more nominations than any other provider, including HBO for this year's Emmy Awards.
The real issue with Netflix is that it has to fund all of its content via subscription revenue. The upcoming Disney service doesn’t. By the time it’s content hits the service, it’s slready made money from theatrical releases, pay tv services(?), video on demand, DVD sales, cable TV etc.
Also, Netflix is building a huge content catalog that has value outside their streaming ecosystem if they decide to leverage it that way. They could do theatrical releases and let cable do reruns of their shows. Maybe they will some day. But for now I think they see the greater CLTV in keeping that content exclusive to drive (and retain) monthly subscriptions.
Another thing that makes Disney's content more compelling is that it's "evergreen" kids can watch the same shows over and over again. They will watch the first Toy Story movie just as excitedly as the last Pixar movie.
VOD services are here to stay, and the catalog shifting will continue in order to maximize value. Netflix is doing it at least as well as anyone else.
I'm in the UK and I can't really think of any serious competition they have here. Maybe Amazon, but I don't know anybody who's talking about Amazon Prime originals.