[gentle]

Yeah, you mention it, but I think you're vastly underestimating licensing costs. Hollywood / content producers have them over a barrel, especially now that they're spinning off the DVD business.

On top of that, those servers don't run themselves and those infrastructure costs you so quickly dismiss are significant.

[sethg]

This. When you own a DVD, you can rent it out as many times as you want and you don’t owe the studio another dime. When you have a digital movie on a server, every act of streaming it to a customer constitutes “copying”, subject to a license fee. And the studios want to milk that revenue source for all it’s worth and then some.