DVD movie rentals flick into action

Never have couch potatoes had it so good. The latest Internet phenomenon -- online DVD rental -- is now making light work for Norms (and film buffs) across the country.

Today the Australian market is buzzing with players such as Homescreen, QuickFlix, fetchmemovies and V2 Direct.

Most online DVD rental services work in a similar fashion: customers select a plan where they choose a set amount of DVDs they can have at one time over the period of a month. If for example they select a three-DVD video plan at $29.95, they are entitled to have three DVDs at a time and only once they return one or all three to their supplier do they receive new titles.

When they sign up, customers select from a pool of titles they are interested in -- normally between 10 and 15 movies. This ensures they still get movies they want, should any titles be unavailable. After this it is pretty much all you can eat. It comes down to how much you can watch in a month and return in a month.

The DVDs get sent by regular mail. Along with the incoming DVD is a stamped, self addressed parcel bag that goes back to the DVD rental provider once the movie has been watched.

Because of this concept, there is no such thing as late fees. As long as customers are paying their monthly fees they can see as little or as much as they want and only ever pay the same amount.

The model is similar to all-you-can-eat broadband, said Homescreen chief product offer, Alan Jones. In an unlimited broadband plan, those that download extraordinary amounts of data clearly cost telcos more than the average user. In this model, the heavy users will cost more to maintain as more postage is required than average users.

“We are taking a calculated risk that only a minority of users will use a lot,” said Jones. He said such users were factored into Homescreen’s business plans.

Homescreen was one of the first to enter the market when it went live last September. The company, which is founded by four ex-members of Yahoo Australia, has over 10,000 titles in its collection.

QuickFlix, founded in 2002 and commencing its service at the end of 2003, claims to have “the universe of titles available in DVD Region 4 format” -- which is over 8,000 titles, according to company CEO Stephen Langsford.

This year Telstra-backed fetchmemovies, and V2Direct, went live with their services -- fetchmemovies subscribers can browse through more than 9500 titles.

V2Direct, the online rental arm of Video 2000, boasts a similar amount of titles as all the above players but for one point of difference -- it also stocks X-rated material. “This rounds out our entertainment offering,” said V2Direct company director, Brian Brent.

To lure customers to their business, V2 Direct, fetchmemovies and QuickFlix have free trials, in which customers were given a month of movies to sample. (Homescreen ended its trial in July.) If the service appealed to DVD enthusiasts, it was hoped customers would then secure a subscription to the services.

“We have had excellent take-up to the trial,” said fetchmemovies spokesperson Craig Middleton. He did not turn that into any precise figures.

A new rental model

Quickflix’s Langsford said the company needed to create awareness with consumers of this new DVD rental model.

“I have been an avid goer of video stores for many years,” he said. “When I first heard of this model I wasn’t that keen. It takes a bit to get your head around it. But when you do, the free home delivery and removal of late fees is a compelling proposition.”

While fetchmemovies has been able to get the marketing might of Telstra to promote it, QuickFlix has been able to leverage off an existing partnership with Optus to gain customer mindshare.

“Optus is a major partner and is important for customer acquisition,” said Langsford.

QuickFlix has several ways in which it gets into the mindset of Optus customers. One is through QuickFlix promos contained in marketing and billing material sent to Optus customers.

“Optus is a well-known brand and has a large customer base and we are integrated into their campaign for DSL and mobile customers,” he said.

Another way is through the Optus portal. What this means for Optus customers is that because QuickFlix has a presence on all OptusNet portals, they have immediate access to an online DVD rental company, as opposed to searching for one online.

Service is important

According to Homescreen’s Jones, the company has developed some very intuitive software to ensure customers are satisfied with selections and recommendations.

“With 10,000 DVDs in our database, it is only useful if there is an easy way to choose DVDs to watch,” said Jones.

He said peer interaction was important: “We have editorially driven recommendations.” This is where customers rate the movies they watch and when a customer has raved about, or bagged, a certain movie, Homescreen's software compares that to what it thinks another customer will watch. This is similar to what Amazon.com does, but not the same, he said.

“Amazon, although very popular, doesn’t take into account what you thought of a book, DVD etc,” said Jones.

Beyond that, is an important directory structure to categorise films. “We work hard to help people chose films… and provide them with all sorts of information -- links to official movie Web sites, trailers and reviews,” he said.

To beef up its review process Telstra struck a licensing agreement this month with AgentArts for its ExpertDriven Movie Recommendation product. The American company will provide personalisation and highly personalised movie recommendations for fetchmemovies customers.

Telstra BigPond Managing Director Justin Milne said that while fetchmemovies’ library of titles might seem a little overwhelming to start with, “when customers receive personalised recommendations it can only enhance their enjoyment of the service”.

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