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After 25 years, Netflix will be shutting down its DVD rental service this September
(dvd.netflix.com)
This is a most excellent place for technology news and articles.
They will possibly be sold off. In the UK we had postal rental service called LoveFilm, and when it eventually shut down many of the DVDs started appearing in second hand stores. For a whole there were bulk boxes of 100 random discs that were being sold very cheaply.
I don't find it very likely. All those current Netflix DVD users are also potential customers for the digital subscription. Suddenly all those DVDs floating around for pennies would reduce that number of potential customers, which I believe Netflix doesn't want.