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Rogers Jumps Into Online Rentals

5 Sep, 2005 By: Holly J. Wagner

Rogers Video has become the first major rental chain in Canada to dip into the online rental market through a partnership with Zip.ca.

Rogers, which operates more than 300 rental stores, offers more than 35,000 titles online at www.rogersvideodirect.ca.

The online rental market in Canada is about a year behind its U.S. counterpart, said Gord Howie, VP of business development for Rogers Video.

“Most of the others are small start-up companies,” he said. “We have been tracking U.S. trends very carefully. We followed Netflix and considered partnering with Netflix in the early days.” The service uses Zip.ca technology and inventory. Consumers can choose from four pricing plans that operate like Amazon.com's capped plans: Subscribers pay a monthly fee for the plan they choose, then an additional $1.99 per rental if they exceed the monthly cap for that plan. Plans include a one-out plan for $10.95 per month with a three-disc monthly cap; two out with a six-disc cap for $18.95 per month; four out with a dozen-disc cap for $24.95; or six out with a 16-disc cap for $34.95 (all prices quoted in this article are in Canadian dollars).

All but the one-out plan also give subscribers at least one “ASAP” slot in their queues. The subscriber can move titles to the ASAP slot to ensure that title is the next one shipped. All plans also have a “park” list that lets them bookmark titles for later rental without listing them in an active queue. And if subscribers cancel and later rejoin, they'll find their queues just as they left them when they quit.

“We are sort of dipping our toe in the water to see where it leads,” Howie said. “We are on the Rogers/Yahoo page (a partnership between Rogers Cable and Yahoo) now. The signups have increased dramatically. It shows the power of the brand, and the association with Rogers/Yahoo is very strong.”

The model is a straight profit-sharing deal between Rogers and Zip. “We are responsible for the marketing and the back-end piece. They are responsible for the inventory and distribution,” Howie said. The chain may soon sell online subscriptions from stores, and executives are considering offering in-store perks as Blockbuster Online does in the United States.

The average Rogers store stocks 4,000 titles, so the online service lets Rogers merchandise catalog and smaller titles in a way that isn't possible in physical stores.

Zip.ca launched in February 2004 with a $24.95 monthly three-out plan and by the following May made that a four-out plan. The company also offers a two-out plan for $18.95 and a six-out plan for $34.95. The plans have no ceiling of discs per month and offer point rewards for membership and participating in various activities such as reviewing titles, referring friends and buying used discs or gift certificates. The points are redeemable for benefits such as an extra ASAP slot for a month, extra rentals or gift memberships.

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