This is a killer article in the NYT about Netflix Vs Wal-Mart.
They talk about Netflix having a huge first-mover advantage, but Wal-Mart having all the strategic resources and capabilities (supply-chain, brand, processing) necessary to mount a massive attack on the market. However, Netflix' FMA means that it's already got infrastructure resources (technology platform, mail-order distribution), IP, and a loyal user base.
This is going to be an extremely interesting battle to watch. My guess is that Netflix will try to be like Google - to get close to it's consumers, figure out what they really want, and give it to them as painlessly as possible. This will mean that Wal-Mart will have engage in (what a surprise) massive price competition, which may actually *not* count for very much in this market - price elasticity in video rentals is pretty low, in my opinion. Essentially, I think not being hassled has quite a bit of value in this market - and I'm not confident that Wal-Mart will be able to understand this.
I'm also kind of surprised that Amazon hasn't acquired Netflix yet. There is a natural fit between the two firms in terms of competences.