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Peer-to-Peer Trading a New Wrinkle in DVD Economy

4 Jul, 2004 By: Kurt Indvik

The new DVD economy continues to spawn new transaction models, the latest of which you can read in this week's issue of Video Store Magazine.

We're talking about online portals that facilitate trading between consumers, and while it's in its infancy, the concept could certainly have appeal for the constituency of DVD owners who are not consummate collectors, but rather find themselves, at some point, with dozens of DVDs they realize they're not watching any more, but have some value nonetheless.

As Blockbuster and other major retailers develop and market their own trading initiatives, consumers will start to consider other ways to monetize their DVDs and peer-to-peer trading is yet another wrinkle.

“There is massive inventory of DVDs building up in people's houses,” says Dan Robinson of Peerflix.com. Indeed, that inventory is beginning to spill over into the marketplace.

Robinson may have only about 500 participants on his network right now, but his and other similar services are expecting that they can serve a growing population of people who aren't inclined to spend their DVDs on video store credit, but are willing to exchange their DVDs for another specific DVD they really want to watch. He actually has an elegant little model that I'll not go into here (it's in the article), but suffice to say it's not an altogether unattractive idea for consumers.

The point here is that, like it or not, the DVD has become a form of currency that a video store owner is going to have to recognize, if he/she hasn't already. There too many places now where a DVD is as good as cash money, and unless your store participates in the new DVD economy you may find yourself left out of the loop and losing business to people you have never even heard of before, not to mention Big Blue down the street.

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