It's a form of price discrimination. If you want to watch a movie once ("rental") it costs $5 but it you want to watch it unlimited times it costs $20. As a customer, I appreciate this because it allows me to pay less when I want less.
Why discriminate? Let's say users watch N movies per month on average. They can set average purchase price per movie at $20 / N, not at $5. That's it. They can combine the two to make it more even. Charge X per month for the convenience of streaming and Y per movie for the purchase (and aim to arrive at the same $20 / month roughly). All that doesn't require any DRM.
I find such price discrimination to be a despicable practice, unless we are talking about differentiating prices because of different average level of income in those markets. And even so, regional discrimination becomes even less relevant in the digital space. The fact that such practice leads to resorting to unethical methods in the digital world (DRM) implicitly proves the point that it's crooked.
I agree, but they have every financial reason to keep doing it. How would you convince them to sell one product for one price to everyone for less total money?
Usually such crookedness can be avoided if competition is high enough. I.e if competitors can be profitable without ripping customers off, they could do that in order to attract customers to their option. Seeing that they are losing customers, those who resorted to price discrimination start thinking about restraining their greed. Unfortunately when completion is weak, or all participants agree on using this crooked practice to keep the prices high (which should be illegal really), they get away with it.
