"Unlimited" 

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.

"Peer to Peer Trading" 

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.

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, and selections from lower in their rental 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".

On March 2, 2006, Blockbuster announced^[2] that their service does not implement throttling. However, their official policy^[3] concerning their Selection and Allocation of Product, still contradicts this announcement.

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 speciality 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.

Netflix is the prototype for the entire industry and the dominant company in the U.S., closing out 2006 with over 6.3 million customers^[4]. Blockbuster Video claimed 1 million online customers in August 2005 and expected 2 million by March 2006. Walmart briefly entered the market as well, but withdrew and now has a cross-promotional agreement with Netflix^[5]. There are a number of smaller companies, some of which target specific niches - GameZnFlix also offers video game rentals as part of their subscription package, for instance, while content-edited ("Family friendly") companies offer films that have been modified in order to suit viewing by the entire family. There are also several online DVD rental companies that specialize in adult movies.

The Canadian rental environment is less developed than in the U.S. - the major company (ZIP.ca) is far larger than any rival, but is an order of magnitude smaller than Netflix even taking population differences into account. Estimates put the number of Canadian subscribers at 50-60,000, with ZIP.ca having around 36,000. Netflix had announced plans to expand to Canada in 2005, but has put these on hold, while Blockbuster Video, which has stores in Canada, has not yet made known any intention to enter the Canadian online market.

Given the relatively small geographical area and high population density of the UK, online DVD rentals have some differences from in the U.S, as a single shipping facility can serve the entire country. There are also a bewildering number of companies, but many are actually separately branded versions of the dominant company, LoveFilm, which provide the website, fulfilment and support services. In most cases the "powered by Lovefilm" partner brand is a company with access to a large existing customer base (supermarket chains, newspapers, media companies, etc.) which it can direct to its branded site. Each brand may have slight differences in price, quantity, website features or ancillary benefits, but the actual DVD service will be from the same source.

In April 2006 LoveFilm itself merged with its major rival Video Island, which had operated ScreenSelect and other brands^[6], creating an operation with 300-400,000 subscribers^[7] and an estimated 60-70%^[8] share of the UK market. Competitors include Blockbuster, Amazon.co.uk, and a number of small and medium-sized providers.

There are three providers in Ireland - Screenclick, Moviestar and Busy Bee DVD. Screenclick was reportedly purchased for €3 million by British firm LoveFilm in 2006^[9], its 15,000 subscriber count at the time reportedly now increased to over 40,000^[10]. Moviestar is the most recent entry, and currently claims around 15,000 customers.^[11]

There are several providers in Australia, the most prominent being BigPond Movies (owned by Telstra) and Quickflix (listed on the Australian Stock Exchange). Information on the Quickflix site put it as #2 in the market, with a subscriber base of around 14,000. Based on this and other available estimates (BigPond at 60-70%) the Australian market would appear to be very roughly in the 40,000 subscriber range.

There are 3 online DVD rental companies in New Zealand, all offering flat-rate packages. The three companies, all located in Auckland, are DVD Unlimited, Fatso and Movieshack, . Both Movieshack and Fatso offer FastPost shipping to customers nationwide, while DVD Unlimited ceased to offer this in late 2005.

Movieshack was launched on June 28th, 2004 and introduced the first large commercial online DVD rental system to New Zealand, which was followed 2 weeks later by the launch of Fatso.

All major companies offer a library of 14-15,000 titles, and have similar pricing packages. One report in early 2007 put the New Zealand market at around 15,000 subscribers, with DVD Unlimited at 40-50%, Fatso with 35-40% and Movieshack with the remainder^[12].

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 2004, and was followed by several others like MovieMart, Madhouse, SeventyMM, CineSprite, CatchFlix and LazyGenie, in no particular order.

Categories: Articles lacking sources from December 2006 | All articles lacking sources