$5 seems a lot. I pay Amazon £7.28/month for DVD rentals. This gives me 3 disks at home at a time and unlimited rentals. I can usually return them at the weekend and midweek if I'm feeling lazy and watching a lot, or just once a week if I'm a bit more busy. Going with the second, that's 12 films a month for £7.28, or 60p (a bit under $1) per movie. TV shows typically come 2-4 episodes on a disk, so divide by 2 or 4 for episodes.
I'd happily pay £10-15 per month for a service that had the same range as a DVD rental service, provided DRM-free streams in a standard format, and had a reasonable download cap (maybe 30 hours per month for £10, 60 for £15, something on that order).
I don't want to pay for a movie, I want to pay for access to a large library of movies that I can watch however I want, on any device I want.