The original point was that a "netflix" provides better content than cable to start with.
The argument against it was that the company providing the content would be exclusively providing that content.
The rebuttal is that it would be better to pay 5 companies that all produce exclusive content than to pay for cable, which "provides" mostly stuff you don't want to see (and frequently don't have the option to not watch, if you're viewing any of their content, ie: commercials).
And my rebuttal is that paying 5 (or 10, 20, 50) companies that all produce exclusive content is almost exactly what cable is, the only differences are you pay a middleman instead of the companies directly, and usually can't choose individual providers, they come in preset packages.
I'd rather see independent producers distributing their content over various netflix-like providers, otherwise we're just transplanting our current content production model to the web. That will suck for both consumers and producers.
"Netflix seems to be the only one that realizes this, and has started producing their own content (e.g. House of Cards and Arrested Development), and I think this is the only true catalyst that will change the industry for the better."
There's a big difference between a company like Netflix producing their own content, making it available for watching uninterrupted, whenever you like -vs- any of the content providers that charge cable companies for their content streams that include commercials and are generally not available "on demand", packaged together through a single company that won't give you just the content you want, when you want it, but charges you for some combination of provider's streams in a package.
Hence the argument of "the alternative is having to pay $100/month for a cable subscription to watch garbage you don't want to see". 5x7.99 is not the cost of cable. The only cable packages you can get for that price are extremely limited. Also, they will require another $4.99 a month for on-demand, on top of your regular cable fee, unless you're paying more than $100 a month, in which case, it's included. ¬.¬
You've just described cable. If those subscriptions start to come in packages we're back to square one.