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DVD-by-mail is a business model in which customers rent DVDs and similar discs containing films, television shows, video games and the like, ordering online for delivery to the customer by mail. Generally, all interaction between the renter and the rental company takes place through the company's website, using an e-commerce model. Typically, a customer chooses from a list of titles online and adds titles to a queue. As a customer's requested titles become available, the company sends them out. When the customer is finished with the disc, they mail it back to the company.
DVD-by-mail arrived in time to compete with video rental shops, but both have largely been overtaken in developed countries by video on demand (online streaming) services.
Most companies operate on the following model:
Most companies let customers keep the films for as long as they want; customers are, however, limited to a set number of discs out at any one time. Commonly, once a disc is returned, another is sent out. Some companies or plans may have a limit on the total number of movies rented in a month. Memberships are usually billed monthly, and includes postage both ways.
Variations exist; for example, some companies also offer video game rentals while others offer music. Redbox allows a user to reserve DVDs or Blu-ray discs online to retrieve and return the DVD at interactive kiosks located in various retail establishments.
Given sufficiently fast mail delivery, customers on "unlimited" plans who return their discs quickly enough can receive enough shipments in a month that the company's cost of delivery exceeds the fixed monthly subscription fee, making this type of customer unprofitable. Even below this point, higher volume customers are 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 significant publicity with regard to Netflix (which refers to the practice as a "fairness algorithm"). [1] In this case, high-volume customers may experience a greater likelihood of (slower) shipments from alternative warehouses, when the nearest shipment center does not have the requested disc. Also, if there is a high demand for a particular disc, 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 list. [2] 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.[ citation needed ]
LOVEFiLM came under scrutiny from users over its claim to offer "unlimited" movie rentals. Some users reportedly found the company used long delays at the shipping stage to reduce the number of films a month a customer can rent. The company was subject to a dispute by the Advertising Standards Authority over the use of the word "unlimited" in their advertising. It was revealed that they practised throttling. [3] The company itself claimed that this "fair usage" policy means all customers get a similar service.
On March 2, 2006, Blockbuster announced that their service does not implement throttling. [4] "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, (i) the historical rental volume for each subscriber, (ii) historical number of outstanding rentals relative to the maximum number of outstanding Blockbuster Online Rentals allowed under a subscriber's plan, and (iii) the average rental queue position of Blockbuster Online rentals that have shipped to a subscriber in the past." [5]
![]() | This article needs to be updated.(September 2019) |
The following is a summary of the major DVD-by-mail markets.
Netflix ended 2008 with 9.39 million customers. [6] Around 4.2 million individuals in the U.S. still rented DVDs via mail from the company as of 2017. [7] Netflix announced on April 18, 2023, that their DVD subscription services would be closed and the last DVDs sent via mail was on September 29, 2023. [8]
Blockbuster claimed 1 million online customers in August 2005, 2 million by March 2006, and finished the first quarter of 2007 with 3 million. [9] By the end of 2013, Blockbuster had withdrawn from the DVD-by-mail market. [10] Walmart briefly entered the market as well, but withdrew in 2005 and now has a cross-promotional agreement with Netflix. [11] There are a number of smaller companies, some of which target specific niches: eHit, [12] the first such niche company, came online in 2000 targeting fans of Asian films; specifically Japan, China, and Korea, expanding to include other countries' films over time.
Estimates put the number of Canadian subscribers at 70–80,000, with Zip.ca having had around 50,000 before ceasing operations.[ citation needed ] Other competitors include Kaku.ca and DVDlink.ca. Cinemail.ca announced it would cease operations at the end of June 2013.
Blockbuster Online started DVD rentals in Mexico during 2007, after the chain acquired a local startup called MovieNet.[ citation needed ]
Blockbuster Online started DVD rentals in Brazil during 2006 and now offers Blu-ray plans as well. The 3-disc unlimited rental plan costs R$49.90/month with unlimited exchanges. [13]
Given the relatively small geographical area and high population density of the UK, online DVD rentals have some differences from the US, as a single shipping facility can serve the entire country. In-Movies.com launched the UK's first subscription service in May 2000 at £14.99 per month for a 3 disc plan and merged with Screen Select in December 2003. In April 2006, LoveFilm merged with its major rival Video Island, which had operated ScreenSelect and other brands, [14] and in February 2008, LoveFilm acquired Amazon's DVD rental business in the UK and German markets. In return, Amazon became the largest shareholder of LoveFilm. [15] [16] [17] LoveFilm ceased operating on 31st October 2017. Cinema Paradiso is now the only remaining supplier of rental DVDs in the UK.
The most prominent Australian provider was Quickflix, which provided the service alongside online streaming of movies until it ceased operations in 2021. Other companies which operated in Australia included HomeScreen, which Quickflix acquired in 2005, and BigPond Movies, which sold their library of 50,000 titles to Quickflix in 2011.
There were three online DVD rental companies in New Zealand, all offering flat-rate packages. The three companies were DVD Unlimited, Fatso and Movieshack. On June 7, 2008, all three companies merged into Fatso, owned by SKY Network Television. Fatso ceased operations on 23 November 2017 due to declining membership.
Hollywoodclicks and Videohub are the two most established online DVD rental services in Singapore. Hollywoodclicks was the first to market, followed by Video Ezy Online. Video Ezy Online rental service was shut down at the start of 2009 and was converted to a home delivery service.
There are several online DVD rental services in India, all running their own delivery systems and logistics. Unlike online DVD rental companies in other countries, online DVD rental services in India do not use the postal service as a means of delivery or exchange. India's first online DVD rental service Clixflix started in August 2004. [18] Cinesprite, Seventymm and Reliance BigFlix have closed their operations.[ citation needed ] Clixflix (the oldest) is still in operation in Mumbai.
Major online rental Blu-ray Disc and DVD companies are Tsutaya Discas, Posren, and DMM.com.[ citation needed ]
Netflix is an American subscription video on-demand over-the-top streaming service. The service primarily distributes original and acquired films and television shows from various genres, and it is available internationally in multiple languages. Greg Peters and Ted Sarandos are the co-chief executive officers of Netflix.
A video rental shop/store is a physical retail business that rents home videos such as movies, prerecorded TV shows, video game discs and other media content. Typically, a rental shop conducts business with customers under conditions and terms agreed upon in a rental agreement or contract, which may be implied, explicit, or written. Many video rental stores also sell previously viewed movies and/or new, unopened movies.
Blockbuster is an American multimedia brand and former rental store chain. The business was founded by David Cook in 1985 as a single home video rental shop, but later became a public store chain featuring video game rentals, DVD-by-mail, streaming, video on demand, and cinema theater. The logo was designed by Lee Dean at the Rominger Agency. The company expanded internationally throughout the 1990s. At its peak in 2004, Blockbuster employed 84,300 people worldwide and operated 9,094 stores.
Video Ezy was an Australian home video rental business that offered titles on VHS, DVD, Blu-ray and Ultra HD Blu-ray, as well as console video games, for rent. At its peak in the mid-2000s, Video Ezy had over 500 company-owned and franchised video rental shops in the country, and owned 40% of the Australian video rental market after taking over Blockbuster's Australian operations. The company also expanded internationally into New Zealand and Asia.
Redbox Automated Retail, LLC is an American video on-demand streaming and video rental company that specialized in DVD, Blu-ray, 4K UHD rentals and purchases and video games via automated retail kiosks and TVOD, AVOD, and FAST services via its website, Android and iOS apps, and many consumer electronic devices. Redbox kiosks feature the company's signature red color and were located at convenience stores, fast food restaurants, grocery stores, mass retailers, and pharmacies.
GameFly is a privately held American online video game rental subscription service that specializes in providing games for Nintendo, Sony, and Microsoft systems starting from the sixth generation onwards.
Zip.ca was an online DVD rental and movie rental kiosk company operating in Canada. It had a database of over 82,000 unique titles.
LoveFilm was a United Kingdom–based provider of DVD-by-mail and streaming video on demand in the United Kingdom, Sweden, Norway, Denmark and Germany.
GameZnFlix was a DVD-by-mail subscription service offering flat rate rental of home videos and video games to customers in the United States. On September 6, 2007, the company did a 1:1000 reverse split of its stock and changed its ticker symbol from "GZFX" to "GMZN." The company's home page went dark in November 2008.
DVD Unlimited was a DVD-by-mail service based in Auckland, New Zealand. It was a wholly owned unit of SKY Network Television. It competed directly with Movieshack and Fatso.
Brick and mortar is an organization or business with a physical presence in a building or other structure. The term brick-and-mortar business is often used to refer to a company that possesses or leases retail shops, factory production facilities, or warehouses for its operations. More specifically, in the jargon of e-commerce businesses in the 2000s, brick-and-mortar businesses are companies that have a physical presence and offer face-to-face customer experiences.
Movieshack was an online DVD rental company in New Zealand. Based in Auckland, it was launched on 28 June 2004 and introduced commercial online DVD rentals to New Zealand. The company was founded by brothers James and Nick MacAvoy, who created the customised software systems and website.
BookLender is an online book rental company, the first to offer flat rate rental-by-mail to customers in the United States. Established in 2000 and headquartered in Vienna, Virginia, it boasts an inventory of over 100,000 titles and more than 13,000 subscribers. On June 8, 2007, the company announced that it had delivered its millionth book.
Fatso was a New Zealand online DVD and video game rental service that mailed DVDs, Blu-ray discs and video games to customers around New Zealand.
Internet television in Australia is the digital distribution of movies and television content via the Internet. In Australia, internet television is provided by a number of generalist, subscription-based streaming service providers, in addition to several niche providers that focus on specific genres. Australia's five major free-to-air television networks also all offer catch up TV of previously broadcast content to watch via their webpages and apps, and a number of ISPs and other companies offer IPTV – the live streaming of television channels sourced from Australia and elsewhere.
Quickflix was an Australian company that provided online DVD and Blu-ray Disc rental by mail as well as internet streaming of movies and television shows via online pay-per-view or subscription.
John Antioco is an American businessman, known for being the former CEO of the now bankrupt Blockbuster Video who missed an opportunity to purchase Netflix before it became a multi-billion dollar streaming platform. He is now chairman of the board of directors at BRIX Holdings LLC and the Managing Partner of JAMCO Interests LLC.
Netflix Inc. is an American technology & media-services provider and production company headquartered in Los Gatos, California, founded in 1997 by Reed Hastings and Marc Randolph in Scotts Valley, California. This is an abridged history of the formation and growth of Netflix, which has grown to become the largest entertainment company in the United States in terms of market capitalization as of 2020.
Marc Bernays Randolph is an American tech entrepreneur, advisor and speaker. He is the cofounder and first CEO of Netflix.
Netflix, Inc. is an American media company founded in 1997 by Reed Hastings and Marc Randolph in Scotts Valley, California and currently based in Los Gatos, California. It owns and operates an eponymous over-the-top subscription video on-demand service, which showcases acquired and original programming as well as third-party content licensed from other production companies and distributors. Netflix is also the first streaming media company to be a member of the Motion Picture Association.