Poynter: Why Physical Media Still Costs More

A Poynter blogger noted that online content is sometimes valued at a lower rate than the "real world" equivalent. He points to the example of Blockbuster's subscription deals: the offline version costs $25 a month for the ability to rent three videos at a time. The online version costs $20 for three movies at a time through the mails and a couple in-store rentals to boot. He speculates that this might reflect a perception among viewers (demand side) that internet services aren't worth as much as the offline version of the same service. But the phenomenon may instead be due to the competition seen online (supply side). Netflix, among others, competes online for these deals, where traditional bricks and mortar stores cannot compete with Blockbuster's massive distribution network.