The video quality is also higher for less effort on cable. What I think it will take for the displacement to happen is another large improvement in the internet connectivity to American homes and smartphones. Netflix exploded video rentals already, but cable is not quite the same business.

That's where streaming/torrent/pirate solutions keep failing, and not understanding why. Nirvana nailed it: "here we are now, entertain us." The cheaper the price tag, the more technical know-how is involved. Popcorn Time came close, but still requires geek skillz. We're talking people who don't quite grasp "enter key" or "space bar" (much less "grep"), people who just want a limited linear list of what's available right now, who want to pick a channel generally filled with content they'll like, and who just want it to keep going without involvement.

Netflix is great - when you know what you want and are inclined to find it. When they finally get a consistent flow of new content, and set up "channels" inclined toward specialization with a good mix of shows, with some live content thrown in, then cable TV will have reason to panic.

Drop-dead idiot-proof simple. No wonder it took Steve Jobs to "crack" video, and we still don't know what he figured out (akin to "I found a marvelous proof, but this margin is too small...").

Things are broken up by genre or new releases just like they used to be in video stores because it's pretty intuitive way to browse movies. "I feel like watching something funny, show me all comedies". Netflix also takes it 1 step further and tries to sort it by relevance based on previous watches.

Their interface for DVD players is quite good too. The search is smart and it only takes seconds to go from the DVD player being off to watching a stream from Netflix.

I rarely load up Netflix knowing exactly what I want to watch. I have ideas based on genre what I want and Netflix lets me browse reasonably. I've been a sub for almost as long as they've been around and I still find good stuff. The only thing that lacks is newer releases on stream but you can blame the media providers for that.

My cable provider sometimes offers free access for a month to their on demand/pay per month movie service and it's a joke. Things are listed alphabetically with 90 pages to go through or it's by genre but you're stuck going through 28 pages of alphabetical results where you see nothing but the movie title and a 1 sentence plot. It's an awful user experience.

The cable interface is also bad, but things are broken out by genre and broadcast station (eg some people prefer HBO stuff). It's a bit annoying because it's slower and I have to use a remote control, but that hasn't prevented my finding things I want to watch. Neither side is going to win by interface, but on selection; Netflix has fewer hits but more depth, Cable offers more populist and newer stuff.

I'd drop them instantly without thinking twice if a better solution existed with equal or better selection, cheaper prices and more promising short term goals.

For the same reason, the 90 page channel listing, dominated by "your not subscribed to this but we're going to show it to you anyway in hopes you might upgrade to include it" and "here's 37 duplicate channels all showing the same movie at slightly offset timeslots", has got to be driving people away - many staying only because there isn't a brain-dead-easy option hearkening to the days of 4 channels.

I hope that market segment with half a dozen choices never becomes fully main stream. I like choice in moderation (ie. web frameworks with opinions) but movies are just entirely different.

There's just too many interesting genres and type of movies to filter a list of 100,000 movies down to a handful. It's a very complicated problem to solve and might be unsolvable until we have huge break throughs in how machines process human input.

Example, how would you solve this problem: Customer A watches 5 comedies in a row then is proposed a choice of 3 movies. 1 comedy, 1 sci-fi and 1 romance.

If customer A picks the sci-fi movie you cannot conclude that he didn't like the comedy or romance choices. He just happened to prefer watching a sci-fi movie that night. You don't even know the outside conditions too. Maybe his friend is over sitting in the room while they pick the movie, you simply cannot know.

Binge-watching happens because Netflix autoplays the next episode each time. They could take it one further by making more content decisions for the user, going beyond proffering recommendations, which still require user action.

Hard choice.

So the barrier to entry is free knowledge, if you already have the same requirements to watch Netflix/Hulu.

I realize some of this is not perfectly logical and is contradictory. However, I see it as a broken system, with entrenched players acting poorly, and the best way to force adaptation is to pay when they offer me a way to and not pay when they don't. My hope is that this incentivizes the power players to move towards a system where all content is available for purchase should someone want to purchase it (which, given the minimal barriers to uploading copyrighted content, seems like they should have embraced long ago - especially as companies like Netflix and Amazon monitor pirated content to determine their targets).