I've made do for movies with the channels that came along for the ride when I subscribed to the minimal cable TV package that got me the nerd channels (Science, Discovery, Nat Geo, History, and so on). I've got quite a backlog of movies I'm waiting for.
Recently, I caught a movie (How to Train Your Dragon) on TV that I liked so much that I simply had to go buy a copy on Blu Ray. This also necessitated buying a Blu Ray player. I picked a Blu Ray player that also plays streaming content from the internet and supports pretty much everything other than iTunes.
I then started researching the streaming services (both subscription and rental), seeing how well they covered the movies I'd seen in the last couple of months on TV (HTTYD, Star Trek, Kung Fu Panda, District 9, Watchmen, Shrek Forever After, Happy Feet, Tangled, Bolt, Despicable Me, Monsters vs. Aliens, Fargo, Fantastic Mr. Fox), as well as how well they covered movies still on my backlog, plus assorted movies I'd like to rewatch.
Here's what I found. Neither Amazon nor Netflix subscription streaming provided good coverage of the movies I'd recently seen, the movies on my backlog, or the movies I want to rewatch.
The streaming rental services were a bit better, but still missing a lot.
Netflix's disc subscription service, on the other hand, covered pretty much everything.
So here is where I get confused. Netflix seems to think their future is in their streaming subscription service. This seems to me to be a pretty risky basket to put all their eggs into, because it seems to me that Amazon will have an easier time fixing their weaknesses compared to Netflix than Netflix will have fixing their weaknesses compared to Amazon.
Amazon's weakness compared to Netflix is that Netflix apparently has more content (that's what people tell me, although for the movies I'm interested in they seem about the same). To fix that, Amazon just needs to make some licensing deals. They don't have to build out a lot of new infrastructure or enter a new line of business or anything like that. It's a "write a check" problem for them.
Netflix's weakness compared to Amazon is that Amazon subscription streaming is part of Amazon Prime--and there are good reasons to have Prime besides the streaming. I got it for the shipping savings, and I'm also enjoying the Kindle lending library. (Brick and mortar retailers, like Barnes and Noble, and Best Buy, seem to be doing their best to drive people to Amazon, and so I see Amazon Prime becoming more and more common--but this is best left for another rant).
This makes the question for a lot of people "Netflix in addition to Prime?" rather than "Netflix or Prime?". That's a much harder case for Netflix to make. As I said, for the movies I've checked there are very few on Netflix that are not on Prime--it would cost me less to simply rent those movies. As Amazon closes the gap on content, "Prime plus rental" will become a better choice than "Prime plus Netflix" for more and more people.
It seems to me that Netflix's best weapon against Amazon is their disc subscription service. It provides the most content (both recent and older). It provides the highest quality content. It provides extras (commentary, deleted scenes, and all the other nifty things that come on disc besides just the movie).
Yet Netflix treats their disc service almost as if it is an embarassment. There's no link on their main page for it. It only seems to be mentioned in their FAQ, where they imply that it is an add-on service to the streaming service, and give no link to details.