For instance, while both services have a "Play Instant" feature, Greencine's selection is typically limited to classic movies, while Netflix's selection is a smaller subset of their DVD offerings; in addition, some of their instant-play selections are not yet offered on DVD. The major disadvantage of Netflix's service is simply that one must use Internet Explorer and a PC to view this content.
The one major feature that I miss about Greencine is their "Quick Return" feature. At anytime during your rental period, you can go online and mark a DVD "returned", and Greencine would send the next film on your queue. There's no similar service on Netflix, and I find that sometimes Netflix is not as fast on processing returns (due to them not sending out on weekends)
With Netflix's strength being the available on demand selection, it's no surprise that Netflix has announced a $99 set top box, which will deliver these movies on demand to the television. This market is obviously the battlefield in which Netflix will compete with TiVos, DVRs and AppleTV. The Netflix box has no hard drive, unlike the other options; the movie is streamed over the network.
With blu-Ray and HD-DVD essentially being rather unpopular formats, it may just be that consumers skip the format altogether and just move onto download streams.
I don't think this will happen. You're not taking into account the "collectability" aspect of dvd/blue ray. People love to buy stuff, have boxes around, etc. Also, the percentage of Americans with broadband is still, I think, low. Surely lower than places like Korea and Japan. And don't forget the monthly subscription fee!