I see something like this, it makes me want to watch the movie "Thank You for Smoking" again. They can say these things, but it's up to elected representatives to resist the urge (lobbying $$$) to capitulate to them. Canada has had mandatory health warnings for years now - cigarettes still sell. (They are, admittedly, a lot uglier now, tho...)
To be clear, that wasn't a government body that banned the song - it was the broadcasters' self-regulatory body. The government body (the CRTC) wrote them a response after public outcry and told them to revisit the situation.
Let's see - moving bits from servers to users, minimal cost.
Moving disks from warehouse to users, high cost.
Getting disks back from users - somewhat unreliable.
Getting streamed data back from users - not needed.
Maybe Netflix wants to get out of the business of shipping plastic disks all over the US, and are trying to split the two features, so that they can alter the price of that component without affecting the critical mass of streaming customers. (After all, I can't help but think that any business that revolves around moving data from place to place on shiny plastic disks is doomed in the long run.)
"I don't think anyone can come up with a valid music business model that has as many dollars in it as the music industry does today."
Even if there isn't a new business model that has as many dollars in it, the model they're using right now is fast disappearing. They can choose to stay on the sinking ship, or to get onto the lifeboats and survive. Raging about how they want to go back to 1990, when things were wonderful for them, isn't going to change the fact that their distribution business is NOT needed by consumers any more.
They used to have the monopoly on recording studios, but albums are now being cut in bedrooms, with cheap, high quality equipment. They used to have a monopoly on pressing LPs, but now anybody can make a CD in their home computer. They used to have a monopoly on distribution of plastic disks, but now there's a network and a format the remove that need.
The future of the music business is content recommendation and identification - not in distribution or production. The market has already solved those problems.
Love the irony - in fact, it's far easier for Canadian companies to open branches in the US than it is to deliver over the border, too. Customs and licensing is a pain for goods going both ways.
That being said, it's completely within the rights of every country to impose whatever rules they feel necessary/desirable on imports. And it's within the rights of every company to license their goods using whatever criteria they feel will best benefit their bottom line. No matter how stupid it seems to the rest of us. :)