I would guess brand perception might play into it too. I know I've read before (can't find a source though) about a concept in economics where even if you can a

I would guess brand perception might play into it too. I know I've read before (can't find a source though) about a concept in economics where even if you can afford to price your product/service super low, you shouldn't because customers will perceive your product of lower quality. suppose netflix had an ala carte option, and the shitty straight-to-dvd movies and shows were $0.25 to watch, but later block busters were $5-$10 per view. If you see too many $0.25 shows on your screen, you will (I think) begin to perceive netflix as a vendor of crappy, cheap content, which ultimately hurts their whole brand.