James Delahunty
26 Mar 2008 2:59
In an email notification to users, Peerflix has announced that it will cease operations of its DVD trading service. Peerflix competed with rental services like Netflix, but differed because it instead let its users swap their own disc collections. Now Peerflix has decided to cut this service due to escalating operational costs.
Peerflix allowed users to post lists of films they were offering and films they were seeking. A transaction fee of 99c applied and each film was assigned a trade value by Peerflix. When a user received a film on their want list, they paid the sender for it.
The company had maintained that it was like "stock trading" and that users who traded heavily would inevitably earn higher profits from it (a cash-out fee of $10 applied for all accounts). However, problems with the service's trading model were spotted early on, with Techcrunch's Michael Arrington, for example, finding the faults irreconcilable and predicting it would "slide into obscurity."