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A Day (or Week or Month) In the Life of A DVD

18 Mar, 2003 By: Holly J. Wagner

A few years back there was a film called Twenty Bucks that followed the path of a $20 bill from the time a cash machine spit it out to the time it was returned, torn and tattered, to the bank.

I think it's time for a movie following the coin of our realm. We could call it $20 Disc and follow the path of a DVD, from its first sale for $14.95 at Wal-mart on release Tuesday to the day it falls apart from disc rot or a toddler teething on it.

With VHS the story would have been boring. The tape gets bought, maybe rented a bunch of times and then sold at the end of its rental life cycle.

But DVD has added so many new destinations to that cycle. Discs travel several paths from the suppliers. The first fork in the road is whether it goes to rental or sellthrough. After that, the possibilities begin to look like a New York subway map.

A disc can get sold to a rentailer, rented several times (four times, according to the Video Buying Group's recent test), sold to a consumer. Then if it's in good enough condition, the consumer can sell or trade it off to an online used disc dealer (like skinnyguy.com) or put it on eBay for sale to another consumer.

Or maybe a consumer buys the disc at a mass merchant, watches it a few times. Probably has a friend over to watch it. Loans it to a neighbor or two – of course, in a swap arrangement in which each person gets to watch the other's new disc. After the owner tires of the disc, he trades it off at a local music retailer, where another consumer buys it.

That cycle can repeat as long as the disc is in good condition. Ditto if the consumer owner sells a disc to an online dealer who uses the disc to beef up a by-mail rental business.

I can think of plenty of other variations on this and I'm sure there are more than a few I haven't even heard or thought of yet. But what they all have in common is that, unlike VHS, DVD has several life stages. That means more profit-yielding stops and more profit-blocking stops – the times a disc in the hand pre-empts other programming choices, including a rental, cable or satellite or buying another disc.

Perhaps the only thing that is clear is that DVD has created so many new revenue possibilities that the industry will have to find new strategies to make money. You can rest assured that as long as the format facilitates it, consumers will come up with new ways to get the most entertainment for the least money they can.

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