For all I care it can be a million pounds, I probably won't use it either way. My point is that it's not a competitive price. For around £8 you can get a Netflix or Amazon Prime subscription (don't quote me on that, I'm not from the UK, but a few pounds don't weaken my argument, I believe).
These subscription-based services offer unlimited content for a month, whereas these £3.49 give you maybe 2h of entertainment. I'm just saying I don't believe it's a great business model in this day and age. I remember iTunes allowing you to rent movies for similar prices years ago, but that never became very popular, did it?
I suspect more people watch specific films rather than just have them on as background anything-but-the-silence-of-my-brain fillers. If that's an accurate suspicion then the Lionsgate approach isn't so odd.
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.
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.
When I play music it's usually the background for another activity (coding, exercise, parties, etc.). When I play a movie, it is the activity - I actively minimize distractions so I can focus entirely on the movie. It's easier to use a substitute for something that isn't being focused on.
Often it works out that there is a substitute though - and if there isn't, I'm not convinced most would seek out movies in the way you describe.
I wanted to watch a BBC drama the other night and was offered the choice between paying to 'rent' it from Xbox, or watch it on iPlayer for free.
Assuming I do want to watch the movie, by the time I've found it, found that it's available on x cloud platform and will cost me y to subscribe / buy / rent - odds are that foo discovery mechanism has surfaced something I'd be happy to watch on something that I already subscribe to.
There are still substitutes, and I will gladly admit that it's rare for me to say "I only want to watch movieName, no other movie will satisfy me". It's much more likely that I'll want to watch something in a certain category. However, my experience that last few times I've looked through a Netflix category was that the overwhelming majority of the results simply looked like bad movies to me (and I've already watched the handful that actually looked appealing). When I play a music station, it's usually "good enough".
What I was trying to communicate that I am much more choosey about the movies that I watch than the music I listen to. I think this is because the enjoyment I get out of an activity that involves music isn't completely defined by the music. If the music isn't good, the activity can still be very fun. If the movie isn't good, it's very unlikely that I will get any enjoyment out of watching it.
These subscription-based services offer unlimited content for a month, whereas these £3.49 give you maybe 2h of entertainment. I'm just saying I don't believe it's a great business model in this day and age. I remember iTunes allowing you to rent movies for similar prices years ago, but that never became very popular, did it?