There is a simple alternative. If you purchase a title from MA or MA linked website, then to get the movie on KScape you are charged a small fee. If you purchase the movie on the KScape store then it transfers to MA for free.
I cannot see any down side to this. If I purchase a movie on Vudu with MA rights I would be willing to pay a small fee to have it's digital right added to KScape.
This would help cover any "download" charges.
Honestly, if I could get MA rights, I'd just buy the movie on Kscape's store to avoid the hassle. Until then I need the digital rights as I watch movies when travelling and cannot drag a Strato around with me...
There are lots of options. I would prefer an option where K can sustain business over a longer period of time. I am not for the above option as it dilutes the MA proposition.
If I were deciding this, here is what I would do.
A. First remove the increased pricing compared to other online sites. Right now even if the movie costs the same, there is a $4 to $7 extra on K store.
B. Add a subscription for say $10 a month or $100 a year, which would contribute to download credits.
C. Each movie download requires the use of one download credit.
D. Enable MA. Movies bought from store adds one download credit to your account. If bought elsewhere no credits are added, though the movies are available for download through MA.
E. Let users purchase more download credits if needed. Create different plans for this purchase.
F. In case of disc failures or unit failures, download the movies directly from factory during replacement if under warranty. If not charge a discounted pricing for the download at factory service.
Using a subscription guarantees a minimum revenue for longer term survival of K. Adding download credit system takes care of MA purchases not from the store so K does not incur any loss. Most folks have one or two systems. So the most will be covered using the free download and subscription. Extra downloads will cost extra.
The other things K needs to work on priority is getting immersive audio and be on par with discs. Add more studios. Add day and date releases, which will let you view the movie on release date and also download it when they are digitally/disc released.
Finally, if possible, reduce the pricing of components to increase market penetration, but keep the components profitable. The more they sell, the more the subscription revenue and more the potential store and download credit profits.