DVD Rental Industry Commentary

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

There were a few Canadian companies operating on a small scale in 2003, but the industry was shook up with the launch of at the start of 2004, acquiring rivals, and driving its way to control some two-thirds of the Canadian online rental market. There were other strong contenders though, especially Canflix and Cinemail, and an assortment of medium and small-sized companies. 2009 even saw the launch of DVDLink and, introducing some welcome new competition.

However, 2011 was a brutal year for the industry, as five of the ten remaining players went out of business, including Canflix, which had been Zip's greatest rival. We're dissapointed at the lack of choice for consumer, and hope the industry doesn't contract too much more.

The Canadian DVD rental market will probably continue growth for at least several more years as it goes mainstream, driving many traditional video shops out of business in the process. 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.

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