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September 11, 2006
No future for online DVD rental in Ireland?
'BigBen' thinks that there's no future for online DVD rental in Ireland and explains why in in a comment to my post about the rumoured expansion of Netflix into this county -
Xtravision already rent online in the UK (Blockbuster) and they own Pigsback. No way they will be buying [Lovefilm]. If anything they are getting out of the business. That just leaves Netflix. If they move into europe do you think they will give a damn about a country the size of ireland??? No chance. Lovefilm/Screenselect will be hoping to be bought at that stage. Looks for sure that Busybee and those nice guys at Moviestar have made a BIG and costly mistake.
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Comments
I think the main item that will hold this back James is the disastrous state of affairs at An Post.
A letter I posted last week took 4 days to get to Dublin and a local letter took 3 days this week.
Take August for example
Rent dvd on the 1st arrive on the fourth or 5th watch over the weekend and post back on 7th.
If this went on you would be lucky 3 rentals per month.
I can't see these as being a play unless there was a different method of delivery.
Posted by: Pat Phelan | Sep 11, 2006 9:35:53 AM
Online DVD rental is surely only a short term business model in a market that is in a long transition from physical delivery to remote electronic delivery. Sure Busybee & Co. may prosper for five or six years, but then digital movie downloads will truely start to erode their business.
I'd expect them to use the next few years to establish their brand names with consumers and then roll out download services with maybe a 4yr plan to switch balance gradually from 0% download / 100% postal, 20%/80%, 40%/60%, 60%/40% and so on.
Obviously the owners will always be on the lookout for a quick trade sale as fiscal reward through profits is likely to be a long way away. Then again I have'nt seen any of their P&L's or Bal. Sheets, so I can only speculate that profitablity is either currently non-existant or at best negliable.
Posted by: Ciaran | Sep 11, 2006 12:22:06 PM
Well, I guess with movie downloads around the corner, one would hope, the postal model will fast become redundant. I didn't know that extravision were renting online. I hope they offer a better service then they do from their retail outlets. Lovefilm are planning for movie downloads as far as I know.
Posted by: Paul O Mahony | Sep 11, 2006 12:56:23 PM
