The DVD rental by mail industry was pioneered by the US company Netflix, launched in 1999 to take advantage of the power of the internet and easy delivery of DVDs by post, while eliminating hated late fees. Online rentals have also been around for years in Canada, but even now, not many people have heard of them. Customers love not having to go down to the video store and the absence of late fees (which generate 18% of video store income), and given low subscription prices, don't seem to be a in hurry to swiftly return discs to get new ones; average Canadian customers hang onto a DVD for an average of 6 nights before posting back. Instead of paying an average of $5 at a video store. By comparison, a 3-disc unlimited subscription, assuming you only watch a 3 discs a week, comes out to $1.98 per disc with market leader Zip.ca.

The situation is similar to the late 1990s mobile phone craze, before the market reached saturation. Prices are relatively low to entice new customers, and most services offer a free trial. There were a few Canadian companies operating on a small scale in 2003, but the industry was shook up with the launch of Zip.ca at the start of 2004, acquiring rivals, and driving its way to control some two-thirds of the Canadian online rental market. To get a sense of scale, in December 2006 Zip noted its total inventory consisted of 320,000 discs, and it sent 25,000 out on average per day. There are other strong contenders though, especially Canflix and Cinemail, and an assortment of medium and small-sized companies.

The Canadian DVD rental market will probably continue rapid growth for at least several more years as it goes mainstream, driving many traditional video shops out of business in the process. For comparison, Screen Digest research indicates that by 2009, rental-by-post will account for nearly two-thirds of all British video rental transactions (and one-third of rental activity in Europe), with Canada likely to fall around the 50% mark in our opinion. The exodus to rental-by-post will obviously hurt video shops, many of which will probably close. So enjoy the free trials and cheap subscription fees while you can.

We at Canada-DVD-Rental-Guide.com will continue to guide the way with our reviews and rankings, helping you pick the best.