The DVD service wasn't available outside the US, as far as I understand.

The reason they can rent-out DVD titles from anyone, is because of the First-Sale doctrine[1] in the US. Basically, once they buy the DVD, they can do with it what they want. It's the same law that lets libraries operate.

With streaming, they need permission of the copyright holders. Who, at first, were all "Who gives a shit about streaming, it doesn't make any money and the quality is shit". Once Netflix proved out how to do it right - then all the studios realised there was money to be made by doing their own platform (even if you do a shitty job of it)

[1] https://en.wikipedia.org/wiki/First-sale_doctrine

You also get director commentary, more foreign language audio and DVD specials that you don’t get with streaming.

They used to be the only bidder now they are bidding against dozens of streaming services competing in different niches. Their DVD business has no competition.

You'd think that with all that competition, NetFlix's streaming service would be much better in order to compete with other companies (which have a far better selection). But somehow they get away with having a crappy selection, despite having lots of competitors.

Conversely, since NetFlix's DVD service doesn't have any competitors they could get away with having a crappy selection, but they have a great selection, and it's been great for at least a decade.

So it still doesn't make sense.

Cost of adding a niche title to NF DVD service is probably less than $1000, since they won't need many copies. I doubt they can get streaming rights for any feature length film still in copyright for under $1000.

Amazon Prime Video does it, as does Youtube.

Both of these have way, way, way better selections than NetFlix streaming.