We've been using Netflix for our DVD rentals for several years. We always sort of hem and haw about canceling the service, because we don't have tons of time to watch movies and my husband and I are both kind of clueless about pop culture so I don't have any idea which movies might be good. We end up filling our queue with movies that we think we might want to watch, but since we have the bare-bones 1 DVD at a time plan, when the DVD arrives we find that we don't actually feel like watching it, and so we avoid watching it, sometimes for weeks and weeks at a time. Recently, it got really bad- I think we received a movie in early August, and I just sent it back last week because I had absolutely no desire to watch it. So essentially we paid 2 month's worth of rental fees to allow this movie to gather dust. Pretty much a big waste of money.
If the above information has left you with the impression that my husband and I are major dorks, I'll do nothing to disabuse you of that notion. In the same time period, I think I probably read about 12 books. So... yeah.
Last week I was at the library with the kids and we took out a bunch of DVD's. We are heavy library users, as I have mentioned before, but never once has it occurred to me to use the library for anything but books. To my surprise, the local library does have a decent selection of movies- they may not have 40 copies of the latest new releases, like Blockbuster, but they probably do have one copy. So you might have to put a really popular movie on hold, and wait a few weeks to be able to watch it (so it's definitely not "on demand")- but you will eventually watch it, and it will be free, and you can take it out for a week and maybe even renew it for another week.
I'm continually amazed by the reources available from my local library. And my kids are thrilled to be able to rent DVD's on a semi-regular basis now. I may just finally cancel that Netflix service.