For DVDs, Netflix’s rights are unlimited and its costs are constrained. For digital, its rights are constrained and its costs are unlimited. In the absence of the first-sale doctrine, Netflix must negotiate each and every title, and the price of the right to stream that digital title is up to the whim of the content owner. For many titiles, you cannot even obtain digital rights, because they can’t find all the people the need to release the rights to do so. What’s Really Behind The Netflix/Qwikster Split?. This explains a bit more about the Netfilx/Qwickster split and associated price jumps. That first sale doctrine should totally apply to streaming content as well…it even seems like it would be a cheaper option to not have to produce DVD’s really at all and have things available as digital copies. I suppose they keep them for people who like to have the physical media…and others who don’t have reliable internet...