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Netflix Streaming Its Way Towards Disaster?

Here's my thinking as of today. I've spent a laughably long time writing it and I think that makes me a complete geek. Plus, it's quite possible that I'm totally wrong, but here goes...

Whether they've implemented a sustainable model for a successful business is up for debate, what with ISPs trying to charge Netflix unique high-usage fees (against net-neutrality) and with movie content providers likely to charge Netflix higher rates once current contracts end. But Netflix had little choice other than to introduce streaming if they hoped to remain a big player in the movie rental market. It's a gamble, but either they had to go for it or else simply resign themselves to becoming a smaller company than they currently are, because it is my current belief that DVD usage will eventually die off. Although I denied it for many years, I now think the day will eventually come when the majority of consumers will choose 'on-demand' methods for movie rentals via the Internet and cable/satellite companies. The quality is getting decent for the average person and the convenience is awesome! (All it's going to take is for the studios and service providers to finally realize that slashing their rental prices in half will result in higher usage; thus, higher profits for all companies involved.)

That said... My hope is that Blu-Ray will remain as the dominant physical disc format, especially for "owning" vs "renting", but its market share will likely be reduced to a niche that would include those consumers who either lack access to the internet or cable/satellite, or for those of us whom will desire the higher audio/video quality that Blu-Ray can provide. My thinking is that Netflix, or at least some company, could still run a successful mail-order business for physical discs; but with demand for renting physical discs dwindled it wouldn't be as profitable as it is now. Hence, Netflix would end up being a smaller company than they are today, and why it is worth the gamble for them to add streaming services.

Misc Thought #1:

Perhaps Netflix should tweak their pricing structure. Perhaps, in addition to an "unlimited" pricing plan, they could also offer tiered pricing for streaming, such as 3 streamed movies for five bucks a month or whatever, 7 streamed for ten, etc. Or maybe they should instead adopt a pay-per-play structure similar to Vudu. (Note that I'm going under the assumption that someday pay-per-play streaming in general will come down in cost and no longer be an atrocious six dollar rental.)

Misc Thought #2:

Lastly, who knows, maybe the remaining niche market will end up being better served by kiosks than even mail delivery? So maybe that aspect of Netflix's future business isn't even assured.
There will definitely be anotherprice adjustment. Management will pass the expense through to the consumer, they have no other choice.

Then it seems others will be competitive with Netflix. In two years it may be time to jump ship.