The size of the library is important, but more relevant is creating value for the customer. In my case, both Netflix and iTunes shit the bed. I want an interface where my wife and I can sit on the couch and collectively pick out a movie to watch. iTunes and AppleTV offer a large catalogue, but never "sells" the movie. There are no user ratings or any other information to give us confidence (false or otherwise) to buy. Content is available, but not discoverable in iTunes. Netflix was once solid, but they oversimplified the interface and now there is no way to browse by genre.

That being said, I think there is an opportunity for something like "goodfilms", but I signed up and it combines the worst parts of itunes with the worst parts of netflix. I am not sure who it helps. Even the cute chart they present is deeply flawed from a UI perspective. They could have at least color coded the dots.