Final answer:
Netflix's model signifies a shift in consumer preferences from physical DVD rentals to streaming services, with a substantial increase in subscribers suggesting a growing predilection for streaming video.
Step-by-step explanation:
Netflix's model, while often initially mistaken for a traditional rental service, actually represents a shift to a subscription-based streaming format that has served as a substitute good for the use-based media rental of physical DVDs. This changeover reflects evolving consumer preferences and tastes, particularly as the convenience of streaming video becomes increasingly preferred over the effort of obtaining physical media. Evidence for this shift in consumer behavior can be seen in the significant rise in the number of Netflix subscribers over time, illustrating that, even with close substitutes in the market like Vudu, Amazon Prime, Hulu, and Redbox, streaming video is, on the whole, becoming more popular than physical DVD discs.