Last year we saw Mickey Mouse going public domain and now every year more and more talkie movies are going public domain too. The talkies began in 1928, and I would say they got very close to what we have today in about 1934 or 35.
That means that every year people will have hundreds of "new" releases on public domain, making paying for watching new movies unnecessary. One thing is preferring the new movies when you have to pay both for new and old movies. Another thing is paying for new films when you have hundreds of old movies as good as the new ones (or better) for free.
I don't know about you, but I could spend the rest of my life watching public domain classics, no problem. For instance, I read a dozen books last year, only two of them were less than a 100 years old.
I would say Hollywood is in a pinch right now, something that will make them miss the days when their biggest enemy was piracy.
There's no need for most people to agree with me. Even if 10% of Netflix subscribers decided to cancel it and move to classic movies, that would already be a crisis for them.
And don't forget that humans have flock mentality. If this gets a little popular, it will be easy for it to explode. Just look at Nintendo now trying to contain the retro gaming boom and emulation.
Next ten years we will see classics led by John Wayne, James Stewart and Kirk Douglas going public, and that would be enough for millions to drop the new so-so movie stars.
Where will people watch the movies? Someone still has to provide a service where you can get them. Most people don't want to download and store them somewhere, Netflix is just easier. And Netflix can easily add them to their collection as well.
There's this thing called YouTube, maybe you've heard about it.
Better yet, Peertube