They aren't competing with Netflix. They are competing with all the other movie on demand services.

Netflix streaming has a poor selection of movies. Netflix dvd in mail is great but there are days of delay in mailing them back and forth.

Netflix is like an all you can eat buffet and this lionsgate is like a streak house. You wouldn't tell the steakhouse that thier food is overpriced because the golden coral sells all you eat for 7.99.

>They aren't competing with Netflix.

It think in practice it will. I don't think that difference in type VoD vs streaming library is as well defined in most people's minds as it is in yours. Same for attaching (much) more value to the one per movie as you do.

You're not wrong about the steak thing, but cheap price plus "unlimited" goes very far in practice I think. And in fact has judging by Netflix performance

It's low enough that for a lot of people it doesn't really matter. I've got Prime and I've got a FireTV. Sometimes I just want to watch "something" and I'll pick from the "free" (included in my Prime subscription that I'd have anyway) selection. Sometimes I want to watch something a bit more specific, and it'll be a ~10 second impulse choice whether or not I think the rental price is worth it.

EDIT: Just browsed through my watchlist on Instant Video, and most of the titles on it are available for rental at GBP 3.49 or 4.49, but quite a few are not available to rent at all, and have purchase prices ranging from around 5 to 15 pounds. I'm going to assume that Amazon knows what pricing works for them, at least in aggregate.

Not a lot for you. I probably only watch a movie every couple of months.

> I probably only watch a movie every couple of months.

In which case you're an outlier and frankly entirely uninteresting as a customer to all these companies from a commercial poverty anyway.