Why isn’t renting digital movies considerably cheaper?

Can someone please explain to me why renting digital movies isn’t considerably cheaper? I recently found myself in a situation where my partner and I wanted to watch a movie that wasn’t available on any of the streaming services we subscribe to. However, the cost of renting it digitally was prohibitively high, which led me to seeking alternative methods to obtain it. This got me thinking: what is the reason behind these inflated rental prices, and why aren’t studios offering more affordable options? Allow me to delve into the possible reasons behind this.

First and foremost, it’s important to consider the overhead costs associated with the production and distribution of digital movies. While they may not have physical copies to manufacture and ship, studios still incur expenses such as marketing, server maintenance, and licensing fees. These costs are spread across various channels, including rentals, purchases, and streaming subscriptions.

Another factor to consider is the royalty split between studios and the platforms that offer digital rentals. These platforms, such as Amazon Video, iTunes, or Google Play, take a percentage of each rental transaction. This split ensures that the platform can cover its expenses, invest in technological developments, and generate profits. The studio must also account for this split when determining rental prices.

Speaking of profits, it’s essential to acknowledge that studios are in the film industry to make money. The production of movies involves significant investments in talent, equipment, and post-production processes. Profits from rentals, purchases, and streaming services help recoup these investments and fund future projects. Therefore, rental prices are at least partly determined by the studio’s need to generate revenue and cover expenses.

Now, let’s address the specific example you mentioned – renting the movie “That Thing You Do” from 1996 for £3.49. While some may argue that this price seems steep for an older movie, it’s crucial to remember that pricing is subjective. Different factors influence the perceived value of a movie, such as its popularity, demand, and availability. Studios may set the rental price based on these factors, taking into account their target audience and the potential return on investment.

Furthermore, consider the convenience of renting a digital movie. It offers immediate access, the ability to watch it multiple times within a set timeframe, and eliminates the need for physical storage. These conveniences come at a cost, which is reflected in the rental price.

In conclusion, the rental prices for digital movies may not be considerably cheaper due to various factors. Overhead costs, royalty splits, and the need for studios to generate profits contribute to the pricing structure. While it’s understandable to desire more affordable options, it’s also important to recognize the value that digital rentals provide in terms of convenience and immediate access. Ultimately, studios aim to strike a balance between meeting customer demands and ensuring their own financial viability in an ever-changing industry.