Switched On: The Peerflix challenge: Rip. Flix. Churn.
posted July 20th 2005 2:20PM
DVD collectors have always been a bit of a mystery to me. Sure, for not much more than the cost of renting many
DVDs, you can buy them. However, with the exceptions of kids' videos watched ad nauseum by the preschool set and
perhaps The Rocky Horror Picture Show, how many times does one want to watch the average movie? Perhaps, like music
collections, movie collections are displayed as reflections of the collector's taste. Or maybe the media shelves of the
masses are simply filled with dusty discs.
Enter Peerflix, which can be described on a basic level as eBay meets Netflix. Peerflix resembles many online DVD
stores, but it neither rents nor sells DVDs. Rather, it depends on a community of users willing to trade DVDs they have
for DVDs they want. There are no subscription fees. Peerflix charges a 99-cent transaction fee and senders are
responsible for the postage charge of 37 cents for the mailers that the company distributes. Behold the $1.36 DVD.
Peerflix is not the first company to try and capitalize on second-hand media. In 2000, WebSwap created a barter site
in which consumers listed all kinds of disposables and desirables along with a means to make up the difference in cash.
While it failed, the standard bar code numbers and descriptions for such media as CDs, DVDs and video games inspired
Half.com, which eBay eventually snapped up. eBay’s flagship site also offers used DVDs, as does Amazon Marketplace.
However, by the time one factors in the profit motive and shipping, used DVDs aren’t a great online deal with most
starting at about $8 and going up from there.
Peerflix will face many of the same issues in reaching critical mass that its predecessors did. The great thing about
network effects is that their momentum allows them to grow quickly; the hard part is getting them started. That said,
Peerflix debuts at a time when more consumers are used to transacting online and DVD movies are at the height of their
popularity. According to Rentrak, over a billion DVDs were rented in the first half of this year.
Fleeting consumption makes DVDs an excellent content source with which to start. The Peerflix terms of service
discourages swapping pirated DVDs, noting plainly that “users may not illegally copy DVDs” and that “as a User, you
acknowledge and agree that you have valid title and ownership rights to any DVDs that you make available.”
But avast ye maties, Peerflix can’t prevent DVD copiers from keeping their pirated version and selling the original.
Besides, once you’ve “traded” a DVD, you gain title to the one you receive, and making a copy technically falls under
fair use. Peerflix may be trafficking in legal physical product, but the fluidity of media it could create raises new
questions around what is ownership.
The legal shenanigans will really kick into the gear if the Peerflix model proves successful enough to expand into
CDs. That could be described as a “poor-man’s KaZaa” except Peerflix would cost more, so perhaps it would just be the
“slow-man’s KaZaa.”
At that point, Peerflix could slow the pirate ships further by implementing a “cooling down” period for purchased
media. You wouldn’t be able to sell a CD you purchased on the service for, say, a month. That would punish those who
were simply disappointed by the CD, but is an example of the kinds of roadblocks companies are being forced to consider
in the post-Grokster era.
Ross Rubin is director of industry analysis at NPD Techworld, a division of market research and analysis provider The NPD Group. Views expressed in Switched On, however, are his own. Feedback is welcome at fliptheswitch@gmail.com.
I collect DVD's because I enjoy having them on hand to watch or lend WHEN I FEEL LIKE IT.
Thanks to WWW.DEEPDISCOUNTDVD.COM, I've been able to get old movies on DVD at really low prices with free shipping.
I currently have over 300 DVD's that are brand made and packaged. Each is in excellent condition and works on my XBOX or my home theater.
When I got my Plasma wall mounted TV, I made sure to get some great looking shelves to place my DVD collection on. Instead of having my disks in disarray like many people, when you walk into my house, you see my huge Plasma and then you see my DVD collection. Every one of my friends and business visitors looks at my DVD wall and says "GODDAMN, where'd you get all those DVD's?"
They are as much a conversation piece as they are entertainment.
Sometimes I lend movies to friends in exchange for a movie or Xbox game which helps build friendly relations. Many times I have movies that noone has heard of (Liberty Stands Still, Capricorn One, Brother, Violent Cop, Fireworks, etc) and people wanna sit and watch them on my Plasma.
I am not buying HD anything for the ridiculous fees associated with that stuff and I have very basic Cable so I can watch Cable news and foreign television. My DVD collection puts Cable's movie lineup to SHAME.
The money I save on Cable and HD goes to my DVD collection. Every month I buy at least 5 new movies. When Thanksgiving sales or a major sale happens at Circuit City or Best Buy, and the movies are 45 a piece, I spend around $75- $100 and buy all the movies I Don't have.
DVD's are also insurable so I don't have to worry about a house fire. I'll get reinbursed for them and start again if neccessary.
I wouldn't pay into one of these rental services simply because when the time comes for everyone to send their movies back, I'll still have mine.
Did I really just read the phrase, "the post-Grokster era"?
I think this seems like a pretty cool idea, and I'd like to see it spread to CDs...
I know I've read before, but what is it about CDs that it makes it (possibly illegal?) to rent them (say Netflix style)? But it's okay for libraries to loan them out?
I just copy DVDs, from netflix, from blockbuster, from friends etc. My dvd collection is HUGE, and I barley paid a cent for em. I love to copy DVDs and sell them to people at low prices. yes..
This seems like a reel (HAHA!) hassle compared to spending under $20 a month for NetFlix.
I purchase DVDs for movies that are my all-time favorites and even then I try to stick to Criterion releases, collectors editions, etc. 99% of these purchases are for movies that I wouldn't dream of getting rid of, so this service is not interesting to me personally.
I have about 300 DVD's. Not Copies, Real Ones.
I have them because I like watching movies, I used to use netflix when it first started, but I prefer owning the movies.
This is great in theory, but, not surprisingly, the wait on the popular discs is glacial, and good luck getting rid of that 'Lost in Space' disc that came free with your player.
On the other hand [DUH!] for porn, makes great sense.
I started buying dvds, then realized that they will be out of style in only a couple years. Blu-Ray or HDVD will replace them, and all those DVDs people are buying will for the most part be worthless. I don't know if really old stuff will look any better in hi-def though.
I have probably about 300 DVDs between my stuff and the kids' videos. I've cut my collection down considerably over the years (sold via Amazon) and now Netflix acts as my virtual library. Most of what I have is repeat-viewing stuff (including a number of TV show Season Packs, some sci-fi stuff, some great comedies, etc.).
I agree, though; a $20 monthly fee for Netflix pays for itself quickly. I will eventually buy the movies I really want to own, but -- especially when space is a consideration -- a Netflix or buy/sell practice is pretty on target.
And, FWIW, I'm not a duplicator. I buy the movies I like. The only time I think I ever ripped a DVD is when it was in PAL and I needed it in NTSC.
Fair Use? You are kidding, right?!
I'm working on about 700 dvd's at the moment. About 500 are originals. I worked at a music store and we would buy used dvds for a dollar or two and sell them for $5-6. That's how I aquired most of them. The other 200 are all netflix rent and burns. I've bought only 2 dvds in the past year.
I think I need to stop collecting soon though because I've run out of movies that interest me and I only watch maybe 1 or 2 a week.
"Besides, once you’ve “traded” a DVD, you gain title to the one you receive, and making a copy technically falls under fair use."
Um...not quite. First, DMCA restricts 'fair use copying' of DVDs, because of their built-in copy-protection scheme. Second, when you give away the original, your legal claim to "backup copies retained for fair use" is null and void. In other words, you ditch the original, you're giving up claim to the copyright, and thus are legally obligated to destroy or release any copies you have.
But that's not to say what you described doesn't happen all the time, anyway. I'm only questioning your claim that it's legal -- it's not. And even then, it's nearly impossible to enforce -- probably why nobody has tried yet, save for a brief attempt to ban used CD sales in the 90s by...of course...the RIAA.
to the first post
dvds are going down the path of betamax
when hd dvds become the defacto standard
the majority of people will look down to the old dvd format and scoff at its pitiful image quality
your prized dvd collection will turn into things nobody wants to buy
I think it's a great idea, I just hope it can get the critical mass necessary to take off. As a netflix subscriber since nearly the start I am comfortable with sending out dvd's but I doo need ot understand exacly how they put this together. I guess a test run is in order
I have to say for me owning has to do with having the best possible version of a movie on DVD. Maybe it doesn't make sense to everyone, but there's a lot of stuff out there where you can find a differenct cut of the movie, or a higher quality transfer if you buy an import or hard to find version. By the way, I wouldn't call these "$1.36 DVDs" because you are trading a DVD you paid for to get them... Consider the value of that on eBay.
This would be a great idea not so much for DVDs but more for PSP UMDS. I mean really, who would pay 30 bucks for a movie thatll only play in a PSP.
"DVDs are going the way of betamax"
Uh... no, Betamax was never a standard, never even that popular... DVDs have a HUGE market penetration, and can be played in myriad portable DVD players, laptops, playstations, xboxes, car players, etc...
DVD will become an obsolete format, but not for 5 years, probably - not enough people have HD-TVs yet for it to be any faster than that. Remember, DVD has been around since 1998 or so. I bought a first gen player, and it had to have been in 98 or 97...
Regardless, even when HD-DVD/Blu-Ray becomes the #1 format, there will still be some use for ye olde DVDs you have lying around... after all, on a laptop screen/portable DVD player/minivan backseat, does the extra resolution from a HD-DVD matter? I think not...
"Second, when you give away the original, your legal claim to "backup copies retained for fair use" is null and void. In other words, you ditch the original, you're giving up claim to the copyright, and thus are legally obligated to destroy or release any copies you have."
since the illegal action is not the trading away of the movie that you have backed up (it's the viewing of a movie that you've traded away), it's fair to say that Peerflix has a line of separation between what they're doing and the piracy issue.
"dvds are going down the path of betamax when hd dvds become the defacto standard. the majority of people will look down to the old dvd format and scoff at its pitiful image quality"
what do you get out of DVD that you would get more of from the next gen discs? extra features and picture quality are pretty much it, and since DVD extras have always been rather pathetic and an afterthought, the only thing that is going to cause a DVD collection to really be outmoded is if they can't keep up in picture quality. how does DVD resolution compare to that of HD TVs? if DVD has as much resolution as current HDTVs (that are so slow to be adopted), i don't think we can expect a whole new wave of TVs to come out that outclass DVDs. besides, i believe both next gen players will still be able to play DVD discs so you're not going to have an issue where your current player fails and you'd be forced to buy an outdated player to still be able to watch your existing library.
Blu-Ray or HD-DVD or whatever probably won’t catch on because of price and #%! DRM,. Current DVD looks pretty good especially upconverted on one of the newer players. Theatrical screens are flickering 24fps fuzz, home theater is already crisper.
My LCD display can handle 1080p perfectly but lacks an HDMI or HDCP or whatever so I can’t use it with the latest sources. Long live DVD Decrypter and big hard drives.
Removable media is (or will soon be) obsolete. I saw a post on one of the tech blogs this morning about 100mbps over cable. Products like Adobe Premiere and FCP in the hands of talented everypersons will de-centralize entertainment power. The next blockbuster might come from your neighbor and never see any optical disk.
I looked into Peerflix, but was dissapointed that the packaging (case, book, etc...) is not swapped, just the disc. Usually the disc is enough, but for some releases, I'd like those things too!
Netflix and Public libraries have saved me from a useless accumulation of DVDs. I personally do not need to own everything I like. Most notably, I do not require ownership of things I may utilize once a year. Although I can appreciate a large collection of DVDs, CDs, or whatever, it is no longer for me. After moving many times, I have come to realize that it is true that I do not own my belongings, but that they own me.
Sneakernet v2.
I agree with consumerq. While its fine for people to own massive DVD collections, I prefer only have the odd couple that i know I watch all the time. There is no need to own every shit hollywood excretes.
I think this would be a better idea if it were books instead of DVDs.
Copying most DVDs does not fall under fair-use because you have to decrypt them first, which is illegal under the DMCA.
I've been a member for 8 months now, and have no need for netflix. I still buy the odd movie on impulse if I want to watch it NOW, because I have that confidence that if it's not an instant classic I MUST keep to show my grandchildren (when I have them) I can send it out on Peerflix, for effectively the Full retail value (except in peerbux) which credit I use to get my standard 3 movies a week through peerflix. Also, once in a while if I like a movie and want to hang on to it for a while (or forever) it doesn't slow down my movie flow one bit (unlike netflix and its ilk)
I tell everyone I know about peerflix, because you see, it's in my interest. The more people on peerflix, the larger MY virtual library of DVD's
Rock on Peerflix!
-Mark Sencer
I noticed that some of the DVDs they are listing as available have not been released yet? Sin City for example.
I have a son who watches Anime. It's hard to get new Anime at the local Video store and other places like -- BestBuy -- charge high dollar amounts for these things. I signed my son up for PeerFlix and he loves it. He exchanges Anime shows all the time. I've also used PeerFlix and I noticed that new releases, big name DVDs, and first run DVDs are hard to get. PeerFlix is good on: "B" horror and Sci-fi, Anime, Westerns, Kung FU, and low budget Adult titles.
What they need to do is load the pipeline with a few "New Releases" each month and sell some DVDs back to an exporter to remove some of the dead weight DVDs. (this works great -- it's what the old Music store I used to work for did)
Talking to a few people at PeerFlix they are going to expand to a few other catagories - like Video Games,UMDs and even Music CD in the near future.
I would recommed PeerFlix to everyone - A Great thing about PeerFlix is your first DVD is Free.
Mac users should avoid Peerflix. Peerflix worked fine for me for 2 trades. Then my browser was suddenly unable to connect to the website. No explanation, and I can't seem to find a work-around. It appears that Peerflix is incompatible with MacOS and/or Safari. Yet I keep getting emails from Peerflix, demanding that I send out my DVDs, even though I can't access the site to manage my account. All emails to them have gone unanswered. I can't even get to their help or customer service, since they are linked to the inaccessible main page. So, it's a great service... if you don't have a Mac.