The real problem is that the managers don't understand what they have. Like Amazon, the real power of Netflix is its extensive user-reviews and recommendation engine - which Netflix has let go completely to shit.
Could you imagine seeing only reviews from users who agree with your taste? Being able to make movie recommendations to your friends and followers through Netflix? Being able to search for a movie by actor, writer, director, year, category, etc? Going over to a friend's house, and having Netflix recommend a movie it thinks you'll *both* like? How about having separate ratings/recommendations for every member of the family, so that Netflix stops recommending "Dora the Explorer" for you?
Yet, in 5+ years, they've done nothing to move towards any of that. They had a friends feature (which was *completely* inaccessible from their website - you had to google for the link) which they removed because "no one was using it." They took away user profiles, so you have no way to know which user-reviews to trust (the "top three reviews" are usually also the first three written, because of their poor review-sorting). The closest thing they had to a decent search was the "sortable list," which they also took away, without reason.
With the million-dollar Netflix recommendation contests, it was clear that Netflix *used* to know that the user experience is almost as important as what random TV shows they offer - it's not just about offering the right content, it's also about letting users who would enjoy that content *know* about it. Yet, somewhere along the way they lost that, replacing managers who understood with managers who think "removing useful features" is the same as "streamlining the website" (PROTIP: Make friends and user-profiles easier to find/more accessible, and people will use them!).
If Netflix doesn't shift gears and start listening to its customers, they're GOING to get replaced by someone who will listen.