Peerflix has announced it will close its previous core DVD trading platform April 23.
In an email to members (via Stowe Boyd)
Dear Peerflix Member,
Effective April 23, 2008 Peerflix is discontinuing the Marketplace and DVD buy/sell/trade portions of Peerflix.com. While the Peerflix.com web site will be available beyond April 23, 2008, you will no longer be able to buy, sell, send or receive DVDs on Peerflix as of that date. While we have made considerable investments in our marketplace platform over the past four years, unfortunately the escalating costs of operating the marketplace do not make that business viable at this juncture. As we move out of the DVD marketplace business, we are focusing our energy and resources on building the Peerflix Media Network which is now the web’s fastest growing vertical movie network.
Erick wrote in November that Peerflix didn’t know what it wanted to be; after four months it would appear that it wants to be a BlogAds or niche FM for movie sites and nothing more.
Peerflix has taken $10 million over two rounds that included 3i Group, Battery Ventures and BV Capital.
In fact a lot of web2.0 companies didn’t know what they wanted to be…
This is what happens when you don’t have a clear vision
I guess Patent No. 6,847,938 is now for sale…
“web’s fastest growing vertical movie network.” . . . its almost like the leading search engine for french-canadians living in california
fastest growing vertical movie network.
What on earth is that? Some sort of ad network? IMDB? Perez Hilton gossip site?
haven’t been to the site yet. but i fell that it is the lack of leadership and a leader’s vision which is leading to its closure.
man, how could they go to the dead pool when having zero cost ?? i mean it’s not netflix, they didn’t even own any DVD. the system was working by itself and members were shipping DVDs in self-printed enveloppes. the only thing peerflix had to do was collect commission. i mean, WTF ??? Billy Mc Nair is just a damn’ looser or simply bought a yacht with the 10millions$ he raised from BV capital.
I agree with skidoo, it seems like a pretty damn efficient business model, one they could have executed without the VC financing methinks. Why not keep the site up and running if only for the banner ads they could show with the extra traffic. They are doing something dreadfully wrong if that unit isn’t cash flow positive.
I guess the world wasn’t ready for vertical movies….
It could have been a good business model but I think the market did not just respond to it hence deadpool.
Having started and worked at a competing site (swapadvd.com) I can say that they were always changing their business model which seemed to lead to their downfall.
Seems a smoke screen to me…something else must be wrong. Seems an executable business model plus with all the analytical tools available why are they just finding out that the DVD component is infeasible?
one more example that not every web startup can succeed in offline business or product delivery.
Well I feel bad for the peerflix members who have built up a big “trade cash” balance from sending out their own DVDs and now will have nothing to show for it.
How about giving them an alternative and maybe even working with a free alternative where they can transfer over their credits to such free alternative and use them there?
Good for the current peerflix members, good for the guys behind peerflix (don’t have a bunch of angry people who will never trust one of your startups again) and good for alternative owner and members…everyone wins!
Or why not at least try and sell off those assets and let someone else run the trading network?
It was a great idea poorly executed and poorly managed. Anyone who saw the peerflix game their marketing team spit out had to wonder how they were spending their money.
Didnt help that superior sites like http://www.swaptree.com popped up at the same time that they were having what appeared to be leadership and direction issues.
Sometimes being so laser focused as peerflix was just leads to trouble.
Being a DVD retailer I could have guaranteed their death long ago. The reason is discs are so cheap, people don’t care about swapping them. It’s dealing with a garage sale level of sales, which is fine if you are a mass platform site like eBay, but to be singularly focused, it means trouble.
David’s example of swaptree is a better one, which a chance to survive. And because they aren’t bound by one category, they could easily open up to more areas of interest and expand their business.
“now the web’s fastest growing vertical movie network”
I love this quote! .. Yep they are not only the fastest, they are the first and only.
What did they do with that money? How do you blow through that? Code monkeys and foozeball tables can’t cost that much!
Too bad. I liked the idea and figured they would branch out into other media (i.e. swapping video games). I suspect that the customers just didn’t come as I had 30+ DVDs on the site that weren’t moving. Of course no one is going to swap their great movies so that might have had something to do with it. Too much crap…. not enough quality.
5% damage rate on DVDs! Do the math. Same reason why Netflix wants to get out of DVD rentals and into online streaming.