How? Define "need" and "replace." If something is not available on a digital service, it's not replacing anything. And if you want something and the only available place is that service, then you "need" that service to watch it.
If Netflix didn't exist, we'd all be fine. That's how we know we don't need it.
Replace - I'm not sure how much I can add on top of what we've already said, that Netflix has been replacing its mail order business with digital for the last 15 years or so.