Pressed discs are incredibly cheap to knock out,espescially on a small scale. You only have to look at the budget discs produced by the likes of Alpha.
The problem is that Warner is a major corporation and it "doesn't do small". Producing a disc at Warner always costs a lot because it involves a large part of a huge operation - for example, their marketing dvision. Moreover, Warner just isn't interested in making small amounts of profit - it's "if it doesn;t make ten million then it;s not worth our trouble"
Outfits like Alpha can do it because they are small, when they have discs they get them made in small numbers, and contract out to a cheap independent to do it. Precisely the opposite of Warner who probably spend more on designing the lettering on one their DVD covers than Alpha do on producing an entire release. Because of this they can operate on much small profits and profit margins.
I think of it this way: Warner are like a company that operates passenger liners. They transport large numbers of relatively wealthy people over long distances. They aren't set up for, and aren;t interested, in taking six people on third class fares across the local river in a small boat. It's an automatic loss for them.
The MOD system is probably a small department within Warner that operates on a semi-independent basis that doesn;t involve the mass machinery that a standard DVD release does. Also, the premium prices of the product give a big enough return to be "worthy" of Warner.
The price of physically producing the DVD discs themselves is pretty much a non-issue.
The main thing is the scale at which a company the size of Warner can profitably operate at - with a sufficient scale of profit.
