August 2004 Archives

UPDATE (05/11/2005): Please read this entry before subscribing to Peerflix.

I've been a subscriber to NetFlix since the very beginning. I believe I joined up in early 2001, back when you could have 4 DVDs out at a time for about $20/month. NetFlix has been kind enough to keep us "old-timers" on the 4-out plan when they switched to a 3-out plan. However, the viability of NetFlix has been concerning me lately, for the following reasons:

1, Their stock price has plummeted over the past 2 months.
2, Blockbuster has recently opened up a less expensive online service with the addition of 2 in-store rentals a month and Saturday warehouse processing.
3, NetFlix increased their monthly fee by $1 in June.

These factors led me to look at some alternatives to NetFlix. I wanted to stay away from Blockbuster's service because I know that a ton of folks will be signing up with them and that reviews will abound the net shortly. Therefore, I took a look at two not-so-known competitors - NumberSlate and PeerFlix.

I found these two alternatives through either Hacking Netflix or the Netflix Operations group at Yahoo.

What they had in common:
Both NumberSlate and PeerFlix are decentralized - in that there is no central warehouse for DVDs to be returned to and shipped from. The subscriber is responsible for sending the DVD along to the next person on the list. So, with both service, once I completed watching a movie, I had to log onto the website and get the address of the next person to send it to. In both cases, I was responsible for paying the shipping cost (shipping is "free" with Netflix). Since NumberSlate uses heavier padded envelopes, their shipping cost of 60 cents was almost double that of PeerFlix at 37 cents. The task of sending out DVDs was not as annoying as I thought it would be. PeerFlix actually displays a web page with the recipient's address to print out that fits nicely into their envelopes. The goal of the decentralized system is to reduce shipping times. Instead of having a DVD ship to a warehouse, and then ship back to another customer and thus requiring 2 trips in the US Postal Service's system, both PeerFlix and NumberSlate reduce the amount of time a DVD sits in the mail by relying on the customers to keep the DVDs moving.

Each service had a monthly fee:
PeerFlix - $5/month (or $10/month if want PeerFlix to pay for shipping)
NumberSlate - $10/month (However, NumberSlate also had an adult movie section that could be gained access to for an additional fee, I think it was another $8/month). Also note, NumberSlate had a bidding process that could be used to increase your ranking in the movie "circle", which will be discussed later.

How they differ:
Beyond the decentralization factor, these 2 companies vary greatly in their business models.

DVD Libraries and Requesting Methods
Perhaps the greatest difference between PeerFlix and NumberSlate (and the whole DVD rental business as a whole) is that PeerFlix relies on its customers to provide the DVD library. As you can guess from the name, PeerFlix is similar to a peer-to-peer file sharing program in that users provide the content. To illustrate, say I have several DVD movies that I've purchased but very rarely watch. I can list these movies on PeerFlix to be requested by someone else within the system. Once another customer requests the DVD, I print out the address form and send it on using the provided envelopes & protective paper DVD case to the individual who requested it. Once he or she receives the DVD, he or she goes onto the web site, informs the system that the DVD was received in good shape, and then I get a set number of "Peerbux". With these Peerbux, I'm able then to request movies from other DVD owners. Should I want my original DVD back, I would have to go back in and request it. I probably won't get the exact DVD that I originally sent out back, but I should at least get the title back.

Once I started up, I was given 10 Peerbux. I then looked at my queue from NetFlix and requested the same (about 20) movies. Within 3 days, my first 4 movies were sent to me. Since I don't really own any DVDs that I wanted to give up, I went to Target and bought Fight Club for $10. I informed PeerFlix that I had the movie and within hours somebody had requested it, thus giving me another 4 Peerbux to work with.

NumberSlate uses the traditional model where they provide the DVDs. After signing up for their service, I requested the same 20 or so movies as were in NetFlix and PeerFlix, however it was over a week before I received any movies at all from NumberSlate. One difference with NumberSlate was the ability to "bid" on movies. If you placed a bid on a movie (anywhere from 1 cent to 5 dollars), your position in the queue for that movie would be increased. For example, if I requested Lord of the Rings and there were 10 other customers who also requested before me, I could increase my position within the queue by placing a bid for it. Of the 20 or so movies I requested, other customers had bid on only 4 of the more popular ones. Bid amounts tended to be between 5 and 25 cents.

Web Sites/Selection
Both NumberSlate and PeerFlix had surprisingly good web sites. The search function and browsing capabilities were similar to NetFlix. However, I would say that NumberSlate had a slight edge over PeerFlix in web accessibility and usability. The two problems I experienced with PeerFlix included:

1, The annoyance of having to logon with username/password every time I visited the site.
2, When entering DVDs that I have to add to the library, you supposedly can enter the DVD's UPC code and PeerFlix will identify the DVD. This search function didn't work with either DVD I entered into the system. I had to do a title search to identify the DVDs.

PeerFlix informed me that they are rolling out a new web site within a month that will address problem #1 and add a few new features including the ability to purchase Peerbux with cash and the ability to see what movies are being requested, but not yet in PeerFlix's library.

One great aspect that I found with PeerFlix's website was the ability to talk to a live customer service representative. On every page, there is a button that specifies if a live representative is available. If there is, you can click on the button and a chat session will initiate between yourself and the service representative.

Delivery Speed
I found that delivery from other PeerFlix customer's happened between 2-3 days. As I only received one DVD from NumberSlate, I can't really comment on their delivery speed.

Final Word
This little experiment had a clear winner - PeerFlix.

The fact that it took me over a week to receive even one DVD from NumberSlate and that I stayed a member for another two weeks without receiving a DVD made me drop their service within the month. Even though NumberSlate prides on the fact that they use padded envelopes, I found them to be uneccessary, difficult to relabel, and expensive to resend.

PeerFlix has some quirks, but it can't be beat for $5/month. Over the month, I received 5 DVDs and sent out two. The provided envelopes and the ability to print out a mailing sheet directly from your computer were both big pluses in my book. The one thing that I really didn't like about PeerFlix was that once I received my movie, it tended not to be requested by other customers. This being the case, I found it difficult to accumulate Peerbux. For example, I requested and received the movie Bad Boys II. The movie came within 5 days of my request, I watched the movie, put it back on the movies that I have available, but nobody has requested it since. Therefore, I'm going to be stuck with it until somebody makes the request.

Neither of these services had as good of performance as NetFlix, but they do fill in a niche. I'm definitely going to continue my $5/month subscription with PeerFlix to see the new web site and hopefully continue using them. However, I'm not yet going to drop my NetFlix subscription for the mere fact that NetFlix provides a more consistent flow of movies into the house.

I obviously haven't been able to write up all my thoughts on the two companies, but will be more than glad to answer any specific questions through the comment section of this blog entry.

I know it's not patriotic of me to support John Kerry, but is it also unpatriotic to celebrate in the wake of the U.S. Basketball Team's defeat in the Olympics??

I remember back in 1994 when I gave a speech in my high school English class about how the US should not allow professionals in the Olympics. Back then, the Olympic teams were made up of hard-working college kids who had something to prove. After the novelty of watching the "Dream Teams" of years past destroy the best that the rest of the world had to offer, I knew that the excitement would disappear from Olympics basketball (and to a lesser extent, hockey) and the fan base & participation would dwindle. My prediction has come true.

Watching this year's version of the "Dream Team", I just had to laugh. They don't know how to play a team game, and the NBA rewards the player, not the team. No wonder basketball is quickly falling down the list of favorite U.S. sports. I can almost guarentee that a crack-squad of America's best amateur players could have done a better job than the lackadaisical performance given by the existing team.

As always, the first 2 commenters will get Gmail accounts. I'll need name and email address.

UPDATE: I can't believe no one is going for these Gmail accounts. Considering that my other 2 postings had takers within 30 minutes, and that these accounts are going for $2.50+ on eBay. Maybe everyone who wants Gmail has it already.

I'm getting tired of hearing about Kerry & the Swift boat from both sides. It's been proven beyond a doubt that the people making these allegations are lying. Bush isn't going to ask them to stop, so either Kerry needs to move on or come out with all guns firing attacking Bush's supposed "military" career.

There was a good article yesterday in the Altoona Mirror about an Altoona native who was on the gunboat with Kerry. The guy had nothing but great things to say about him, and that the folks making the negative allegations againist him have no right in doing so because they would have never served with Kerry. Given that the folks in this area (Altoona) form a strong Republican base and the newspaper often reflects that, the positive words from this gentleman were a refreshing read.

I've got 3 more Gmail invites. The first 3 commenters will get them.

I need your name and email.

I have 1 gMail account to give out.

The first person who comments gets it. I'll need your email address.

I finally had time to sit down and watch Kerry's acceptance speech from last month's convention. I was quite simply blown away. It was by far the best speech that I had seen him give. He is pushing a positive message about this country's future, which is something I haven't heard in 4 years. Kerry's plan to reduce our reliance on foreign oil through American ingenuity is something this company desperately needs. It will be interesting to watch GW's speech this month.

The only thing that I didn't care for in Kerry's speech was where he ripped the GW for going to war in Iraq. Considering that Kerry approved the military action in the Senate, he doesn't have the right to be critical. However, Kerry then went on to slam Bush for his handling of the war, the "unofficial" draft of reservists, and the thinning of the troops throughout the world, all of which are valid claims.

Bill Clinton was on The Daily Show last night and several interesting points were brought up. How is it that the scandals that hit presidency rocked the nation, while the current administration can get away with anything? I mean, Haliburton just got fined billions of dollars for fraudulent activities that took place WHEN CHENEY WAS THE CEO!! And this story isn't the top news of the day??? Clinton had an interesting point about how the media is just now getting over the post 9/11 fear of criticizing the government for fear that such actions would seem unpatriotic. I hope this is the case.

Finally, I'm really getting tired of hearing about how Kerry has flip-flopped on several issues. Those who criticize should take some time and check out this site.

Some of President Bush's flip-flops:
1, Promising not to touch Social Security's surplus and then diverting (or planning to divert) more than 1.4 trillion dollars from it.
2, Within 4 month's, Bush changed from supporting a woman's right to choose to opposing it.
3, Supporting and then opposing mandatory caps on carbon dioxide.

I've been a loyal subscriber to Netflix almost since its inception. Over the past four years, I've steadily received 4 DVDs at a time, thus ending any trips to the video store for my viewing pleasures. However, over the past month, I've grown skeptical of Netflix ability to lead the marketplace in DVD rentals. First and foremost, Blockbuster has finally come out with their own online version of Netflix. The service, at first glance, appears to be identical to Netflix. However, the Blockbuster offering is $1 cheaper per month and they have leveraged their base of stores throughout the country and also are offering 2 rentals per month at any of their stores. I firmly believe that Blockbuster's entry to the market is going to seriously hurt Netflix, which now must differentiate itself through delivery time or another means, and seriously consider reversing their decision to raise their monthly rate by $1 last month.

The other thing that has me, as an investor in Netflix, concerned how Netflix calculates its "churn" numbers. Apparently, there have been some serious doubts that Netflix is reporting accurate numbers to their stockholders in regard to how many people sign up to the service but then decide to cancel after the free subscription.

All of these issues have led me to search for Netflix alternatives. Thanks to the folks at Hacking Netflix and a Yahoo message board that I belong too, I have found two Netflix substitutes that have intrigued me: Number Slate, and PeerFlix.

Both of these services are decentralized, in that they don't follow the distribution center method that exists with Netflix. Subscribers to these services actually have to send the DVD to the next person in the queue directly. The pros of this are simple: the DVD doesn't have to take a trip to the distribution center and then to the household who is next in line, thus halving the amount of time that the DVD spends in the postal system. However, the cons are obvious too: the system relies on the ability of the subscribers to address and send the DVD out in a timely fashion (which, granted, doesn't sound like a big deal, but I'll never be surprised by the stupidity of some humans), and the subscriber has to pay for postage (in comparison, Netflix provides postage-paid envelopes to send the DVD back in).

Both of these services are considerably cheaper than either Netflix or Blockbuster; Number Slate is $10/month, PeerFlix is $5/month. The main difference between the two is that PeerFlix relies heavily on subscribers using their own DVD collection to create the DVD library.

As intrigued as I am with the two alternative offerings, I have decided to give each one a 1-month test drive. I have subscribed to both services and will report back at the end of the month (or the beginning of next month) on my experiences with both of them. I already have some initial impressions, but I want to save them for the final report.