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Also, unrelated but in Opera you have had an IceRocket error message for quite some time:
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They took $8.75 million in total venture capital money, and completed 100,000 trades in September 2005
250,000 DVDs in their network. With $8M in cash, they probably bought and added many of those themselves so that they would have some selection or available media. Somehow you have to kick start these things, and the best way is to buy inventory. How many of these DVD's belong to PeerFlix, and how many to actual users.
In their current promotion, they give away a free DVD - probably $1- $1.50 their cost used...and one free trade... So a member joins on the free program, gets a free used DVD, watches it, and then gets a free trade and trades it with another user. In this case, the actual user he may be trading with is PeerFlix so that they can turn over the inventory. No revenue in site in that transaction, and we know that much of the posted inventory is the free DVD from PeerFlix.
150,000 members but only 100,000 trades back in September. So is this really 150,000 active members, or just people that sign up but don't do anything. The biggest problem with Peer-to-Peer trading is that you can't always count on the members to carry through, so you have an enormous customer support issue dealing with cheaters, or getting people to actually want to trade.
So you have to figure that they have less than $50K in revenue but paid dearly in advertising to get 150,000 members. A good figure of merit would be $5/member in promotion before they gave away the free DVD. So they have to convince that member to trade at least 6 times at $1 a trade before they can turn the member profitable. That assumes that you can get everyone to turn 6 trades. More than half will quit after the first transaction. So active members need to turn 12 trades or 1 per month for them to turn a gross profit before accounting for overhead.
So the next question that comes up is why would anyone want to do this kind of trading? You don't get the DVD case, linernotes or cover in the trade. So the resulting disc has no resale value, and is a pain to find in your DVD drawer if you wanted to keep it. So its real value is for churn in the system. If you wanted to do that, why not use NetFlix...at least you wouldn't have to worry about some individual actually following up on a trade. You know that NetFlix will send you the DVD.
Well I guess if these guys can convice a VC into giving them $8M in cash, they can convice the Mercury News that they are getting traction. In this case, my guess is that no one really dug down deep into the numbers. If NetFlix struggles to turn a profit competing with BlockBuster, and they have millions of subscribers paying $15 a month, how is PeerFlix going to go anywhere. I see a fire sale on the horizon for these guys when their investors wake up.... I also see a trademark infringement fight when NetFlix realizes that these guys are coat-tailing on their name.
There are many compelling reasons to use Peerflix either in addition to, or in lieu of, an online rental service. First, we charge only $0.99 per trade with no monthly subscription (in our service, our best customers are the ones who watch the most DVDs; in an online rental model, their best customers are the ones who watch the least movies). Second, you own each of the DVDs you receive. Third, it enables you to use the DVDs that are lying on your shelves collecting dust to get the DVDs you really want to watch. On average, each of you purchased ~20 DVDs in the past 12 months and you've likely watched them 1-2x max. We are building a community of movie enthusiasts who want to drive repeated value from those one-time purchases. This community will absolutely expand into other forms of media (games, etc.) as well as non-media. We have built a trading platform that our members will be able to leverage for all types of products.
I'd also like to clarify a couple of the factual details that people raise in the comments above. Over 250,000 DVDs have been added to our network, but contrary to what people have stated above, over 98% of them have been added by members. The only DVDs that Peerflix has added to the network (less than 5,000) have been the result of promotions that we have run for our members.
We are continually improving our user experience and the community elements of our service. We pride ourselves on taking feedback from our users (just as the feedback you have left above) and using it to develop new product features and enhancements that our members want. We are 100% focused on building the ultimate trading community for our members. If you haven't tried it yet, take a few moments to create a free trial account. After all, what else are you going to do with that DVD your mother-in-law or co-worker gave you for Christmas that is still sitting shrink-wrapped on your shelf? ;-)
-Billy McNair, Peerflix Co-Founder
From a consumer viewpoint, I'd rather pay $0.99 to get a DVD than $20/month to not have time to watch the 3 DVDs a month I could get from Netflix. It's a better deal. I am no VC, but something that is good for the consumer is usually a good business to be in.
When I want to clean up my collection and get rid of duds, I use Amazon or one of the other movie sales sites. Have you looked at how cheap the used movie market is on Amazon? You can buy a movie for $1.50 or less. If you want to buy and sell used movies, you can do it for about a buck on amazon. In other words...sell your used one, and buy a used one and the result is about $1.
The problem with Peerflix and the other trading services like this is there is always a chance that the other guy will not ship their movie to you. Even if that is fairly low, they can be very slow to mail, and that is a pain - I want it now, not in 2 weeks when they get around to mailing. The other problem is that the only movies on their system are the ones people want to get rid of because they sucked. If they were great, they would want to hold on to them to watch again sometime.
I don't care if they bamboozled a VC into giving them $8M. That is the VC's problem. The downloadable "pay-per-view" market is going to weaken the strong (Netflix) and kill the weak ones like PeerFlix. As the price drops in the iTunes music store, and the technology gets better to pay $1.00 and get a movie downloaded, why would I bother with the postage or hassles of going to the mailbox.
If someone on PeerFlix mails from the west coast to someone on the east coast, it will take at least 5 days to get there, assuming the other guy is diligent and jumps up to mail your DVD to you as soon as he agrees to a swap.
NetFlix only charges me $9.99 a month for one movie out at a time...(I can only watch one at a time - ;-) , and swapping the movie within 2 days is great. That means that I can get about 12 movies a month, and I know I am going to get them, and I know what order they will arrive..all for a fraction of what PeerFlix is advertising.
People ask why use Peerflix? I know the reason most people do use it.
I for one use Peerflix because they have some movies you can't get on either Netflix or Blockbuster.
For example Netflix and Blockbuster do not carry most violent, Fighting, Gang related, Drug related, or Adult(Girls Gone Wild, etc.) DVD's, but you can get these on Peerflix if you wait a little while for someone to send it to you. I would rather use Peerflix for these type of movies, than buy them.
I use Blockbuster, and recently starting using Peerflix also for anything I can't get at Blockbuster online or in store with my free coupons.
http://www.switchdiscs.com
but they offer it all and its free. interesting...
The real Elephant in the room is PeerFlix, and it stinks. Joe Cool uses illegal tools to steal movies, and make compressed copies of them. This method gets around the copy protection on the DVD, is a criminal violation of the Digital Milenium Copyright Act, and the results suck. Most DVDs are over 7 gigabytes of data. To make a copy of a DVD, you have to compress it because DVD burners only support 4 gigabytes of data. So you spend $1.00 for the trade on PeerFlix. $.39 to mail it, and $.50 for the blank DVD, and about 4 hours making a copy. You could buy a used copy of the movie for $2, that is much much higher quality. ($.11 more and I get a cover, liner notes and something that still has value.)
PeerFlix advocates sending just the disk in their special envelop. I would put up with this, when I am borrowing a DVD from NetFlix. But I am taking a perfectly good DVD, with Case, Cover Notes etc, and removing the disk and mailing it to someone. The results have absolutely no market value. You have no case to store it in, no cover, no notes. You can't find it in the drawer, and you can't sell it on Amazon.
I have tried trading services in the past. (Ones that actually included the whole DVD package.) They suck because 2 out of every 10 trades are either very slow, or never show. If Joe Cool wants to get a lot of movies without going to Blockbuster - NetFlix is the only way to go!
You can't get Girls Gone Wild on Blockbuster or NetFlix. I don't want to rent what Blockbuster and Netflix want me to rent, I want my choice of any DVD out there.
Blockbuster and Netflix are good for regular movies. But most violent, Fighting, Gang related, Drug related, or Adult(Girls Gone Wild, etc.) are not carried by Blockbuster or Netflix. I don't want to watch what Blockbuster and Netflix want me to watch, this is a free county with free speech so I can watch whatever DVD I want. And since Peerflix carries DVD's that Blockbuster and Netflix do not carry, Peerflix is a much needed service.
Elephant does not get the idea of the service. Who uses Peerflix to keep movies for good, not one I know. Sometimes you may want to keep a movie a while so you have a chance to watch it (or watch it a second time). You can't do this with Blockbuster or Netflix or they will never send you a new movie if you keep one that they sent you. Peerflix will send you as many as you have trade credits and Peefbux for, and you just send them back when you please. Maybe Elephant does not like the idea of the service, but many people do and you obviously have not tried the service so why comment on it?
And you have some wrong info. It does not take 4 hours rip a DVD, it takes 10 minutes to read full DVD9, and about 8 minutes to write DVD-R at 8x (total 18 minutes). If you need to compress add another 15 minutes (total 33 minutes) which is still less than an hour. I don't copy movies, I just know how to do it incase I need to make a backup of one I own.
Oh yeah you don't need to compress any movie either, you ever hear of DUAL LAYER DISCS. ELEPHANT SWEEPER IS A MORON! Obviously does not know what he is talking about (4 hours to copy a DVD, you moron).
If it is $1-$2 it�s pre-played, and means the movie sucks because people purchased it, and then sold back to the store because it sucked.
And there are many DVD's you will never find pre-played, because they are good movies to begin with. So those movies you either pay $15-$20 for at Amazon, or you rent from Peerflix (Blockbuster and Netflix do not carry any DVD's I rent at Peerflix, that is why I use Peerflix).
I like Peerflix because I can browse for movies online, they come in the mail and I can keep them as long as I want. Sometimes at our house we don't get around to watching a movie for several weeks. This is no problem as there are no fees and late charges accruing. It costs 99 cents plus postage regardless.
Some people may find this laid back approach Peerflix's weakness. Sometimes I have to wait weeks for a popular movie to become available. If you want instant gratification, Peerflix is not for you. If you're an occasional movie watcher, patient and flexible, it's great.
I hope the network continues to grow.
Besides DVDs users trade audiobooks, music CDs (lika la la media promises), computer and console games.
I thought I would check out PeerFlix, but scanning through the comments conviced me this is no better than that crappy BarterBee.
The only DVD's I want to get rid of are the ones that I think aren't worth watching again. Why would I think that anyone would be that much different from me? The only inventory we will find on this system are the duds no one wants any more. A bunch of white elephants. I get very skeptical when the only positive comments I see, are obviously posted by PeerFlix employees.
None of these services are very compelling. For the money, I just use pay per view. Much less risk, and much more convenient thanks to digital cable.
Mr. McNair is nonresponsive to his userbase. The forum for PeerFlix is http://www.DVDTradeTalk.com. Mr. McNair steps in about once every three months for damage control and sales spin (just as he did here). The forum is interesting reading and shows that new and long-time users are equally fed up with Mr. McNair weak management, arrogance, and incompetence. Mr. McNair's user-base has provided him with a gold mine of suggestions and ideas to improve his service. Mr. McNair ego will not allow him to accept an idea that is not his.
His business plan is based on deception.
His customer service skills are atrocious.
ALSO: Who in the hell wrote this comment above? --> "their “peermailer” is a terrible idea…whoever thinks you can send a dvd disc through the mail wrapped in a piece of papers is a moron"
Well, I say --> "DUH, Moron! What do you think that Netflix mails them in? Bubble wrap?"
I am not affiliated with Peerflix or any other DVD-swap company in any way, I'm just a guy who had a bunch of DVDs who wanted some other DVDs . . . but I have this to say: That using Peerflix is exciting because I get to swap out movies I'm tired of and get ones I like -- and I get to keep them. Sometimes people even mail the inserts to me, so if I feel like inserting the insert into one of my many leftover DVD cases (if you use Peerflix, you'll amass some) -- I can sell them or keep them forever if I feel like.
Also --> to the user above that wrote that the only movies that people get are lame/boring ones that nobody wants. I say "DUH! I just got Corpse Bride this past week, Unite 93, and Running with Scizzors, to mention just a few. All three of which were academy award nominees and are on relatively high demand on Ebay and Amazon (used) right now.
So, if you want to critique Peerflix -- why don't you try it first? Peerflix has built-in incentives for people to mail their DVDs promptly and in good condition.
Down with Netflix and Blockbuster!
Viva la Peerflix!
-- P.W. (San Diego, Calif.)