PK's Gigi Sohn asks the right question after the movie studios' reportedly rejected Apple's attempt to offer movies for $9.99 in the iTunes Store:
"[W]hy shouldn't the price be lower [than DVDs sold in Wal-Mart]? There are no hard media, packaging or distribution costs, and iTunes markets itself, so the marketing costs should not be as high. So instead of leaping at a new business opportunity that is practically a sure thing, Hollywood is running to Congress for more protection for its old business model, like requiring the broadcast flag scheme and closing the analog hole." (links, mine)
The broadcast flag, along with the RIAA's audio flag proposal, remain part of the current Senate telecom reform proposal. Take action now and tell your Senators to kick out the flags.