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> How is it that it can be significantly cheaper to rent the physical disk than to stream the movie once?

Note you're not just paying the marginal cost, you're also paying for the streaming infrastructure they invested in setting up.

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Yes, of course, but that's still much cheaper than physical disk distribution.

Is it? Stamping and shipping discs costs very little, the license is the major cost in most cases.

Edit: very old numbers can be found here. https://arstechnica.com/uncategorized/2006/03/6400-2/

How do you know? I’m a highly paid engineer who is oncall on a SAAS, it’s been a wild ride. It’s expensive to keep this crap running. But a DVD burner and fedex? That sounds cheap and simple to me.

They don't even use burners at that scale, they use replicators. Takes seconds to stamp a DVD. Here's a place in California that charges as low as $.075 each per copy, and this is low volume pricing...

http://discreplicator.com/Price.html

There are companies that provide on-demand pricing for just the steaming component (edgecast for example). Then just throw up a DynamoDB table and some simple apis in lambda and you have a pretty cheap (relatively) way to deliver streamed content.

Good point but that’s just MVP; to maintain their competitive edge they have to maintain a lot more features on top of that.

They probably are making a significant profit off it, I'm not saying that's not the case. I'm just saying you can't figure that out by just looking at the marginal cost; you have to look at the investment and ongoing costs and planned payoff period too, which is information you probably don't have available.

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