Sure, it's not a nonexistent market, but the number of people willing to spend $1200/year to be allowed to borrow three items of second hand clothing at a time from a catalogue is likely considerably smaller than the number of people wanting to regularly watch movies and TV series. Their current model seems to need a target audience that's both willing and able to pay a premium for designer clothes and focused mainly on value for money. That might not be the smallest niche in the world, but it's probably not Netflix-sized either.

I'd have thought second hand trading would be easier to get right than juggling all the variables of a rental model too...