Trading DVD's with Peerflix

Peerflix is an online service that lets you trade DVDs you own with other people. It works by a ratio system of sorts. Every movie they offer is given a “PeerBux� score, from 1 for crappy old movies, 2 for normal movies, and 3 for new release movies. Box sets can range up to 30 points depending on their current price on Amazon. (A great use of the Amazon Web Services, by the way). The way they make money is that they charge $0.99 per trade for being the facilitator. They also offer a guarantee that if the disk gets damaged in the mail or they try to cheat you, you get your money and Peerbux back. You start off with 2 PeerBux and $0.99 to give you a taste of the system and earn you confidence.

I started off by putting up 6 DVDs as “for tradeâ€� that I don’t watch anymore. Within 15 minutes, someone wanted one, so I sent it to them. They send you envelopes, and the website gives you a page to print off that acts as the address label. Throw them in the envelope correctly, put on a stamp (you have to pay the postage as well) and chuck it in the post box. It credits your account with the PeerBux they spent to get the movie, so you have more “buying power.â€� I told Holly about the site, she though it was a good idea, and we put up about 20 movies. We’ve moved 6 or so out now and have a good number of PeerBux to allow us to get movies we want. The system is designed so that you will by default place movies you’ve received back out in the pool for others to get. Popular movies are always in demand (Batman Begins has about 80 people in queue to get the movie, and it doesn’t come out until next Tuesday). But, there are a LOT of library titles that are freely available. All of the Kevin Smith flicks are up there and available at any time.

The concept seems like it’ll work good. You go out a buy a new movie for $15.00. You watch it, decide not to keep it forever. You put it on Peerflix, someone wants it. You get 3 points for it… and you send it. You’re now at $15.37. You pick the next movie that came out that you want to see, spend your three points and pay $0.99. Now you’re at $16.36 for two movies. Say you do this for a total of ten feature movies. You’ve spent $28.60 on the first movie, ten Peerflix transactions, and ten stamps. That’s $2.86 a movie, and you have just come out ahead versus renting the movies at Blockbuster. What happens if you get Sin City and decide you absolutely love the movie and want to watch it over and over? You keep it. All you are out are the 3 points you spent to pick it up. If you toss some of your library titles up, you’re sure to earn points with no real loss. (We recently sent out a Muppet Show DVD we’ve never opened, and got 2 points for it).

I think that Peerflix’s only “issue” will be revenue creation. $0.99 a trade is a reasonable fee. I hope they are able to turn profit and not have to jack prices up for a long time. But, this also points out a risk in their system. If you have a bunch of peerbux points, that means you have put a lot out into the system as far as DVDs. If they were to shut down operations, you are out that and you may have sent out $50 worth of DVDs to strangers and got nothing back. It’s a risk I’m willing to take.

They have a friend feature that allows you to gather a list of friends and trade movies without spending peerbux (if you wish). If you want to be “my friendâ€� and see my collection, just visit this link. I’ll also get one peerbux point if you sign up. 🙂

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