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Follow on TwitterA reader asks:
Can you tell me how to go about starting a DVD rental business?
Don’t. Of all the businesses you can start this has to be one of the worst. Here’s what I see as the main problems:
- Formats – The DVD format is on the way out, being replaced by High Definition (HD) formats, of which there are two HD DVD and Blu-ray. In a format war reminiscent of Betamax/VHS it seems that Blu-ray has won out and has become the dominant format. However you’re still left with a decision as to which format to support and if you start with DVDs when to make the change to Blu-ray.
- It’s also (I believe) a declining market because there’s increased competition from:
- DVD Rentals by post – companies such as Amazon, Netflix and so on provide direct competition offering unlimited DVD rentals by post for a relatively low fee and offer a far wider selection of DVDs than most shops can carry.
- Digital TV – those of us that can remember (vaguely) there being only three (or even less) TV channels find the number of channels available on Digital TV (and cable/Sky) dazzling and all those channels with all their content (including themed pay per view) provide an alternate to renting a DVD.
- Personal Video Recorders (PVRs) – Now that we can video several channels at once we’re using PVRs to record films, shows and documentaries when they’re on and watching them when it suits us.
- Online TV – and even if we and the PVR miss our favourite show there’s a good chance we can now watch it online.
- Video on Demand – as technology and bandwidth to our homes improves video on demand is finally going to become a reality negating the need to leave our homes to pick up a DVD or plan in advance to order one by post.
- The falling price of DVDs – Our local Tesco often has DVDs on offer from as little as £3 which whilst not being the latest releases can be as little as 6 months old and you still own the DVD after you’ve watched it.
- Ebay – It’s also possible to get a wide range of DVDs from Ebay for bargain prices.
- The Internet – it’s regularly noted that we spend less time watching TV these days and more time on the Internet – that also translates to less time watching DVDs.
A lot of this is indirect competition, but I’m sure it’s going to be shrinking the market for local DVD rental businesses so I for one wouldn’t start one.
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This blog is about business opportunities and ideas that I spot, think of or hear about and think are useful and interesting. It is intended to provide ideas and inspriation for you to help you find the right business idea for you to then grow it into a successful business.
John,
I think you are being a little short sighted with your analysis of the opportunity here. Indeed, traditional DVD rental stores are on their way out due to their high fixed costs and unefficieny of their service. However, the physical rental of DVD’s remains the way that most people watch newly released movies, and what you fail to mention is that the DVD rental market is based primarily on a window in which the movies are not available on many of the other formats you mention (VoD, Digital TV etc.). I have some bias towards this – we have had success so far with our launch of our DVD vending in the UK and Ireland – and expect this to sustain the DVD market for the forseeable future.
I think you’ve rather missed the point. Yes people will “rent” a film in order to see it in the window between the cinema release and it being offered for sale/shown on TV. However the mechanism by which they do that is changing and starting a bricks and mortar DVD rental shop is a bad business idea.
Fair point, but the original poster asked for information on how to start a DVD rental ‘business’ as opposed to opening a DVD rental ’store’. I fully agree that bricks and mortar stores are not a sensible business model, but there are alternatives methods to offering a DVD rental service, which are proving profitable.
Again I think you’ve missed the point. I’m sure a DVD rental business (of any sort) can be profitable now, however I question it’s viability over the medium to long term – i.e beyond the next three years.
Hi
I am seriously (despite above!) considering opening a DVD rental shop where I live in Spain, as there is nothing like it at all. However, I am finding it really difficult to find out where I could buy licensed DVDs for rental from if you could help?
Thank you
The original poster is way off base on his comment on the DVD Industry. Blu-ray players are still way over priced and will remain that way for a long time to come. Me being part of the working class, if I had a choice between a $30 DVD Player and a $500 Blu-ray player in this economy, I am definately going with the $30 DVD player. The standard DVDs are cheaper to rent and buy than Blu-ray.
value added services such as blue-ray player rental will be one of the major revenue generator along with movies rental
I am in Botswana and have been seriously considering a DVD rentals option.Some of the technilogies like blu-ray, HD, PVR etc are not widely used in this country. I thought for me the question was what to do to have a DVD rental with a difference – I am thinking of introducing a new lifestyle using old technologies – how do guys like block busters (UK) manage?
I’d like to chime in here. My production team is opening a ‘brick and mortar’ dvd rental business, but we live in a college town, and will specialize in hard to find and classic horror, kung fu, and cult material. These are films that have dedicated fanatics ravenous for material to consume. Sure, you can wait for it in the mail or to download, or you can come down to the shop, have a cup of coffee, sit on a couch and flip through the catalog to choose a rental. Traditional dvd rental places are still frequented here, btw. I do it.