Netflix is in a difficult position I think. Their infrastructure is becoming commoditized, much of their content is also being licensed to their competitors and their delivery mechanism is no longer unique. What's left for them to differentiate themselves from the competition? It seems like their only choice is to pay steeper and steeper prices to get content that nobody else has in order to justify their value to subscribers.
Their recommendation engine is a key strength. I LOVE it.
Second, at <$10/mo, the cost is not high enough to make bother with switching. I would rather pay $10/mo have the best streaming experience than pay $6/mo have a second-rate streaming experience.
I expect Netflix to come out on top in this battle. Obviously, I'm rooting for them (I dislike companies which squeeze competitors through loss leaders).
