Economically, why does it cost more to stream movies than to rent the physical DVDs

[nightshadea]

I was always told dvd tapes cd’s books and such that was rented/lent out ect cost more because your buying a license from clearing house to rent/lend it out

its why when your puppy chews up your library book you cant just buy a new one at Wal-Mart…

[filmore]

@Wesley_Clark

So either the licensing costs are far far higher for streaming (despite the fact that physical disks are easier to pirate and copy), or all the providers are paying the same licensing fees of maybe $0.50, but tacking an extra $4 onto the price so it costs $5 to stream.

Even if there are higher costs to stream, why isn’t there any sort of price differential between services?

When I search for a movie on my Roku, it finds all the services that are offering it and their price. Recent movies are typically all the same price–about $6 for the HD rental. That’s across Google Play, Amazon, Vudu, and Fandango. Since the product is exactly the same no matter the provider, I would think the providers would compete based on cost, but they don’t. The times that there is a difference is on an older movie. So maybe Jaws is $2 on one service and $3 on another. But the new movies are all the same price.