Remember, legal actions are EXPEN$IVE in the extreme, and bankrupting your enemy (cf. Gawker vs. Mr. Moneybags) creates a very strong "keep your head down" effect not just on the target, but anybody else who might even come close to doing as Take Two did.
Companies listen to whoever is paying them for their products and services.
Advertising-supported entertainment companies listen to the advertisers and the people who actually watch (or put up with) the shows don't matter.
Customer-supported companies, on the other hand, listen to their customers and don't give a hang about intrusive outsiders like advertisers.
One benefit of the new arrangement is an hour-long show can BE an hour-long show. In the 1960s, an Outer Limits episode was 50 minutes long. (Guess where the other 10 minutes went.) Buffy episodes (1997-2003), OTOH, were 40 minutes long. (Same guess.)
People will pay gladly NOT to have one-third of an hour of their time being a dead waste.
The enormous benefits to the viewers are quite apparent to both Netflix and the viewers. Netflix KNOWS that shows are being watched and that "ratings" per se don't mean a damn thing. So good shows have much better odds of surviving. And they're always available on demand for whenever the viewer wants to watch them. I call that a very good deal.
I've seen what cable calls "subtitles", AKA closed-captions. I earthlight as a proofreader, and if I left text that lousy in a book, I wouldn't even be allowed near an assignment. And VOD only exists for as much space as your expensively-provided box allows, as long as you don't try to skip the commercials.