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How DVD Rental By Mail Works (Jun 18 3:52 PM)
How DVD Rental By Mail Works:<<<<
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Most companies operate on the following model:<<<<
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* The customer joins the rental service and creates a list of titles.<<<<
* DVDs from the list are mailed to the customer.<<<<
* The customer watches the DVDs and sends them back.<<<<
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Most companies will let customers keep the DVDs for as long as they want; customers are, however, limited to a set number of discs out at any one time. Once a disc is returned, another is sent out—except for pre-paid memberships. Some companies or plans may have a limit on the total number of DVDs rented in a month. Memberships are usually billed monthly, and includes postage both ways. Some companies also offer video game rentals.<<<<
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An example online DVD rental company is the American company, Netflix.<<<<
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Variation: A variation of online rental, is a company such as Redbox, which allows a user to reserve a movie online to retrieve and return the DVD at interactive kiosks located in various retail establishments.<<<<
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Types of plans:<<<<
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Most companies provide variations on five basic types of membership plans:<<<<
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Unlimited<<<<
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These plans have no maximum on the number of DVDs one can rent, although there is a limit on the number one may have out at any one time (the higher this limit, the higher the monthly charge). Most of the plans at Netflix, Blockbuster, etc. are of this type. Unlimited is something of a misnomer, since one will be limited by the delivery time of the postal service involved, the distance between the customer and the company's warehouse, etc. The company may also take active steps to reduce the number of discs shipped—see the Throttling section below.<<<<
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Limited, capped, monthly maximum <<<<
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These plans have a limit on the number of discs customers may have out at any one time, and also a maximum total of discs that can be rented during each billing period (usually monthly). This provides a cost ceiling for the supplier, and these plans are usually cheaper than unlimited plans. Some plans allow for additional shipments at extra cost once the maximum has been reached. Usually no credit is given if usage is below the maximum, although plans that allow this sort of carry-over are not completely unknown.<<<<
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Package <<<<
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Instead of each disc being sent and returned independently, a package plan sends a certain number of disks together at fixed intervals (often weekly), and one returns all the discs in a single package as well. A common scenario allows for two packages to be outstanding, and subsequent packages ship as a previous one is returned.<<<<
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Individual Rentals, pay-as-you-go <<<<
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A plan of this type would allow individual rentals for a fixed fee (perhaps varying by type/age/popularity of the title), with no monthly fee. Since companies rely on the monthly fees of low-volume renters to make up for those whose shipping costs approach or exceed what they are paying, there is little incentive to offer such a plan, and the rental price would likely have to approach or exceed store costs. Still, it would be a useful alternative for occasional or periodic renters who want access to the huge selection of online companies or the advantages of mail rental, yet do not want the fixed monthly cost.<<<<
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Peer to Peer Trading <<<<
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There is also a completely different variant which might be termed peer-to-peer. Individuals are able to exchange items directly with other consumers, using a company's services to provide matching between customers, mailing envelopes, credit for items traded, etc. Examples include Peerflix and SwapSimple.<<<<
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Season Rental, Series Rental <<<<
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These are company controlled package plans based on a set of predetermined settings by the company. Season rental plans allow customers to rent entire seasons of television shows in single shipments; the customer can not break up or modify the package. Customers often can still queue various packages together for uninterrupted service; returning the first package in order to have the next one shipped (ie. Star Trek season 1 followed by season 2). Such plans are usually allotted either by show, or by season, for a set price.<<<<
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Series plans allow customers to rent entire television or film series in bulk; often in a single shipment, (i.e. Friends TV show or the Baby Cart film series) but otherwise work identically to Season Rental plans.<<<<
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Throttling<<<<
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Given sufficiently speedy mail delivery times, customers on Unlimited plans who turn around their discs quickly enough can receive enough shipments in a month that the company's actual cost of delivery exceeds the subscription fee, making the customers unprofitable. Even below this point, higher volume customers are by definition less profitable than customers who receive fewer discs per month. If these customers become too numerous, there are various measures which the rental company can take. One is the so-called throttling approach, which received a fair amount of publicity in regards to Netflix (which refers to the practice as a fairness algorithm). In this case, high-volume customers may experience a greater likelihood of (slower) shipments from alternate warehouses, when the nearest shipment center does not have the requested movie. Also, if there is a high demand for a particular movie, it is more likely that an infrequent renter will get priority over the frequent renters, with the latter receiving a movie further down on their queue. They are also less likely to receive replacement shipments on the same day a disc is received. Similar fair use caveats can be found in the Terms and Conditions of leading UK companies such as LOVEFiLM. In Canada, Zip.ca switched to Capped plans (with additional shipping charges for rentals over the cap) in part to avoid implementing throttling.<<<<
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On March 2, 2006, Blockbuster announced that their service does not implement throttling. We don't prioritize our customers' movie fulfillment based on how often they use our service, and we don't limit the number of movies a subscriber receives each month, according to Senior Vice-President Shayne Evangelist. However, the Terms and Conditions each customer has to agree to in order to subscribe to the service states BLOCKBUSTER Online reserves the right to determine product allocation among members in its sole discretion. In determining product allocation, we use various factors including, but not limited to, the historical rental volume for each subscriber, historical number of outstanding rentals relative to the maximum number of outstanding BLOCKBUSTER Online Rentals allowed under a subscriber's plan, and the average rental queue position of BLOCKBUSTER Online Rentals that have shipped to a subscriber in the past. concerning their Selection and Allocation of Product, which could be read as contradicting this announcement.<<<<
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Marketplace summaries<<<<
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This form of DVD rental is closely tied to the mode of delivery. The performance of the postal service in various countries can differ, and delivery times also depend in part on a country's geography. A relatively small, densely populated area such as Great Britain poses different delivery challenges to a large area such as the United States (where the major companies have developed a network of regional distribution centers). There are also country-specific implications of the DVD region coding system, and even studio distribution rights within regions. For these and other reasons online DVD rental companies tend to operate in a single country, and even should a company expand to multiple markets, local delivery infrastructure would be required in most cases, as cross-border shipping is impractical in all but specialty cases. Relative pricing levels may also vary depending on the market, the local wholesale cost of DVD product, etc. Following is a summary of the main English-speaking markets.<<<<
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North and Central America<<<<
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United States<<<<
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Netflix is the prototype for the entire industry and still the dominant company in the U.S., ending the first quarter of 2007 with over 6.8 million customers. Blockbuster Video claimed 1 million online customers in August 2005, 2 million by March 2006, and finished the first quarter of 2007 with 3 million. Walmart briefly entered the market as well, but withdrew in 2005 and now has a cross-promotional agreement with Netflix.<<<<
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There are a number of smaller companies, some of which target specific niches: eHit, the first such niche company, came online in 2000. They targeted fans of Asian films; specifically Japan, China, and Korea. In 2003 they expanded their library to include a limited number of American films and again in 2006/2007 they added Thai and some European films. eHit substantially added to the industry as a whole by devising some options later adopted by the majority of online rental companies: the ability to filter previously rented films from standard browsing views, the ability to rate movies that have not been rented from that company, and the ability to filter previously rated films from standard browsing. eHit was also the first company to rent entire series as a single, set price rental.<<<<
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GameZnFlix offers video game rentals, along with movies, as part of their subscription package, while content-edited (family friendly) companies such as CleanFlix and CleanFilm offer films that have been modified in order to suit certain moral groups. Redbox offers online DVD rentals, but requires the customer to pick up the DVD either at a participating grocery store or McDonald's restaurants. Adult DVDEmpire is the largest adult-only rental company offering a wide range of adult entertainment. CinFlix offers only imported films released outside of the United States in non-region 1 coding, including some American films, targeting the vast English As Second Language market.<<<<
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Software solutions such as DVD Rental Software, W3Rent provides online e-commerce systems that let anyone start their own online movie or game rental business.<<<<
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source: Wikipedia.org
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Coupons were last updated on March 10, 2010
