Several times in this article, they make it sound like Netflix is competing with cable. But in reality, Netflix only streams TV shows that are already out on DVD. iTunes is the service competing with cable, both on the PC and Apple TV.
That's the essential problem that the industry has to deal with: there is way more content than most of us have time for.
On a tiny scale they're experimenting with a hybrid model of "instantly available" and "waiting for DVD."