In interviews they've claimed that much of the lag players experience is from poor monitors. I don't know if I buy their claim of how much (I want to say the claim was "most", but I'd check that before I would argue it,) but I can certainly buy that as a contributing factor.

I agree with you though, having to buy games I've already bought once is annoying. But unless storefronts/publishers all agree to hold hands, sing Kumbaya, and honor each other's purchases, I don't see another option.

The other option is a flat fee per month. How ridiculous would it be if Netflix required you to pay $15 per movie before they could rent you a DVD?

There's a $10/month "playpack" package (in the US, at least). Some games are only available in the playpack, some games are only available separately. I would argue that on Steam you don't own the game either.

They use their own hardware, not EC2 or anything like that. They need gaming-level GPUs and they have their own compression hardware.

At least on Steam you have unrestricted access to your games, access doesn't get revoked when you cancel your subscription...

If you get booted off Steam or call them to delete your profile you lose your library. The games are yours until Steam say they're not.

The same goes for the full-price titles on OnLive. The playpack is different, it's the same flat monthly fee model as Netflix. And you can also rent the full-priced titles for a short period of time instead of buying them.

To answer StavrosK's question, they're two separate things: the monthly fee gets you access to the "playpack" set for the duration of the subscription, while buying (the "Full PlayPass" in the jargon) the game gets you the game (approximately) forever. There's no base fee to be "a member".

What happens to the games you've bought if you stop paying the monthly fee, though?

Access to OnLive is free, just like having a Steam account is free.

Some games can be bought. So long as the OnLive servers run, they're yours and you don't need to pay a monthly fee (as with Steam games).

Some games can be rented. For a few dollars you can get full access to the game for a time-limited period (24 hours or a few days). The first 30 minutes can usually be obtained free as a demo.

Some games are available in a playpack. This pack has a monthly fee like Netflix. So long as you keep paying the monthly fee you can play any of the games in the playpack (there's about 50) as much as you like.

Oh, I see. Hmm, that's better, but I don't see how it's sustainable for them...