I think people underestimate the loss of physical media in general and video stores in particular.

Physical media use to account for half of a films eventual gross. Some films even did better. See every cult classic (Office Space comes to mind easily).

When you’re making films that have to be produced for second run distribution on physical media they had to fit on VHS cassette.

Studio VHS production ended in 2006. Netflix VOD began in 2007. At that point the length of your film stopped mattering. It took a few more years for studios and directors to realize it, but that was the actual end of economic constraints.