[citation][nom]Prince_Porter[/nom]My guess would be that while it costs more to manufacture a physical copy, that's basically a one time payment. People continue to rent from the red box, using that same copy over and over, where as online rentals continues to consume data forever. Red Box pays more initially, but then starts earning money very quickly, online rental has to continue to pay to keep it's service running smoothly, while taking a small profit with each rental.[/citation]
Maybe but try explaining that to the rest of the world. $2-3 wouldn't be so bad. If I'm watching it on a 3 inch screen, I'd rather not pay a full price.