Online DVD Rental Business

[Veronica316]

How do they make their profit ? any ideas ? because if say, company 'A' was to give you unlimited DVD's a month for a flat fee of �9.99, and the postage both ways was on them, then how do they make this profit ?. Can they claim the postage back from tax ? or does anyone know of royal mail giving businesses cheap incentives and services than say private usage ?. Any feedback or ideas are welcome !.

[paddy_36]

I know of two online DVD rental businesses, and both limit the number of DVDs you can borrow in a set time period, e.g. 3 per month for �5.99; 4 per month for �7.99. If it were unlimited, then profit would be minimal, if not impossible.

[Bob A Job]

Alot of these types of companys rely on the fact that most people forget to return movies, or dont swap movies regularly. Buying movies in bulk means you can get them at quite a discount, and if i remember right, these companys ask you for a list of films you want and only send you a few at a time. it means they can pick what movies to buy and send out depending on popularity. and use the same dvd for several customers.

[Veronica316]

I agree Bob a Job, that it may be about expecting memebers to forget returning their DVD's or not swapping regularly, this must be the way, because if you have say, a �15 membership, and return 3 movies each week, 4 weeks in a month, pay postage both ways, so all you have left is :

3 (DVDs) x4 (weeks)x0.33 (p 1st class) x 2 (pay both ways) = �7.92 which would leave about only �7.92 profit from each member for a whole a month, not exactly earth shattering, and yet this is one of the fastest 'businesses' people are getting onto, just don't understand what the key to it is

[Hermia]

I am with Amazon's DVD rental service and get 6 DVDs a month for �10. I love movies so always get 6 a month, but I gather a lot of people don't get around to watching them or take ages to send them back so don't use their full quota.