The business model isn't broken at all. It's the same. Video rental and video streaming verses brick and mortar expenses or purchasing over at Amazon. Amazon competes with streaming, but Netflix dominates with online rental service. Blockbuster and Redbox are cashing in on Netflix' price increase by increasing theirs, but are restrengthening Netflix's position, hence business model. It will rebound. It is the co-leader with Amazon, but stands out in one service. It's too big to fail.
I don't see video streaming services doing much harm to Netflix profits in the future as long as Netflix online video rental model stays intact. And it will. They just added Disney and Universal studios and will probably sign other movie companies in the very near future. Be careful here.