Now he’s on to his next challenge, launching and growing a U.S. based DVD lending site called LendAround. The core idea of swapping DVDs isn’t new – services like Peerflix gave in an honest try and eventually gave up. Another service we’ve covered is Swaptree, which is still going and recently raised a fresh round of funding.

LendAround is taking a slightly different approach. First, the site is focusing on loaners, not outright permanent trades. And the goal is to let your friends browse your DVD collection and borrow what they want, and LendAround keeps track of who has what. That removes the issue of people forgetting who borrowed what.

Jackson also believes that the quality of available movies will be much higher with a lending service vs. a swap/barter site. When people consider what DVDs they are willing to swap, they tend to choose the worst 10% on their shelves, he says. That explains why services like Peerflix tended to have masses of unwanted titles and few popular ones. When you are lending to friends, you’ll include all of your DVDs, knowing you’ll get them back.

There are 2 billion DVDs in U.S. homes, Jackson says, and 80% of those are watched just twice a year. Jackson envisions people swapping DVDs with neighbors, work colleagues, church members and sports clubs, where people already know and trust each other and for the most part can hand over the DVDs in person, skipping the mail.

Eventually Jackson wants to expand the service to include other items.

LendAround is currently in private beta but you can sign up for it on the home page. Users are given fifty invites each, and we’ll be adding it to inviteshare tomorrow to help users get into the service. I’ve tried it out – it’s still a little rough around the edges but I found it easy to add titles via a title search or bar code. And I can now peruse Jackson’s 234 DVDs (I’ve requested a loaner of Fight Club). The service is free to use, and the company hopes to make revenue from DVD purchases and future paid services.

Update: If you don’t want to wait for inviteshare, you can get into LendAround right away. The first few hundred people that email techcrunch@lendaround.com will get immediate invitations.

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To create a trade the company finds up to four users who have and want items that form a match. Then everyone prints out address forms from the site and pays the shipping (usually $2.50) to mail it directly to the next person.

One of the coolest features is the ability to enter a few items that you have that you are willing to trade – show you all of the items that you can receive for your items.

This is a model that was tried and later abandoned by the recently acquired Peerflix. Peerflix was DVD trading only, though, and charged a transaction fee. Swaptree doesn’t charge a transaction fee, and the group-trade approach that covers books, music, movies and games means lots more matches.

The company first launched a little over a year ago, and says more than 100,000 trades have been completed to date.

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But it wasn’t so. It turns out Swaptree had merely gone quiet and was focused on building out the product. They are now in private beta and say they will launch to the public in just a few days, on July 4.

Like Peerflix and LaLa, Swaptree is focused on letting users trade certain stuff with other users. Users can trade CDs, DVDs, video games and books.

To use it, you build two lists. The first is a list of items you are willing to trade. You can simply type in the UPC code or ISBN of the item – Swaptree will then add a picture and other important information. The second list is made up of things you want. This list can be created by clicking on items on the Swaptree site, or even easier ways like importing your Amazon wish list or using a plugin to click on items on Amazon directly and have them included on your Swaptree “wish list”.

Swaptree will then look at your demand list and supply list and try to set up trades for you. To make things simple, Swaptree assumes you’re willing to give up any item on your trade list for any item you want. They will then set up a trade, using as many as four users to make it happen. That way, the person with the item you want doesn’t need to want something you have.

The only way the model will work is if Swaptree gets a lot of users who each add a lot of items they want, and are willing to trade. To help things, Swaptree doesn’t charge anything for trades – you only have to pay the outbound postage on the item you are sending. The company will make money from advertising on the site.

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Since that time I’ve had a chance to talk at length with Swaptree founder and CEO Greg Boesel about some of the perceived shortcomings of the service that I pointed out. That conversation, and an eye-popping demo he walked me through, made it clear that I had made some incorrect assumptions about the service.

Swaptree will allow users to swap media items (books, CDs, DVDs and video games) with other users without the use of cash. Swaptree will not charge a transaction fee, relying instead on contextual advertising revenue that will be placed on the site. For a new user, the idea is that you type in a few items that you own and are willing to trade (using the UPC or ISBN code) and you’ll see thousands or tens of thousands of items that people are willing to trade for your stuff.

My assumption was that Swaptree was going to have a difficult time creating a demand curve. Getting a new user to type in a couple of things they are willing to trade is easy. Getting them to type in things that they want and associate them with things that they already have to trade would be much more difficult. At the end of the post, I suggested that actual money served as a very nice stored value currency, and that’s why eBay has been so successful.

It turns out that Swaptree actually has a fairly interesting and much simpler way to build the demand curve of items. In addition to maintaining a list of items that a user wants to trade, they simply build a long list of items they want to own as well. This list can be created by clicking on items on the Swaptree site, or even easier ways like importing your Amazon wish list or using a plugin to click on items on Amazon directly and have them included on your Swaptree “wish list”. When I saw the demo, I was convinced that large numbers of users could be enticed to do this. If there is a match, any match at all between an item that you have and an item that you want, Swaptree suggests that a trade occur to both parties. If both accept, the trade is confirmed.

There are a number of really nice touches as well. Swaptree will analyze have and want lists and try to organize trades among as many as four users, so the possible number of trades increases exponentially. They also allow you to print out an address form and postage directly from your printer. They actually lose money on postage sales after credit card charges, but they felt is was important service to offer. They also have envelopes available and will send you new ones automatically as you use up the old ones. The list continues – basically Swaptree has done a very good job of thinking through the details and making swaps occur as easily as possible (Frankly I wish eBay offered these kinds of services as well).

Sometimes, I love being wrong.

The service is still some time away from launching a private beta, which I will eagerly participate in. Sign up on the Swaptree home page.

Screen Shots:

SplitGames is only is focusing on videogames. This category is probably the most relevant for product trading if you consider the life cycle of a product (quite short) and the high prices of new hot games. Teenagers cannot usually buy a new game every 3 months but they really want to play many new games.

On SplitGames you declare what you have but most importantly what you want. They will guarantee the transaction and match traders in a safe and simple way. Each game has a value in points based on retailpricing, date of release, and supply and demand of the game on the site. Each time you trade a game you accumulate points you can use to acquire a new game. The mechanics is simple and clear. They’ve bypassed Swaptree’s algorithmic approach for a pure marketplace.

SplitGames is not free. But on the other side they guarantee a trading system that works and that enables you to avoid bad surprises (on delivery, choice of games, secure transaction, etc.). Of course this model is also good for the company because success of service will drive directly success of revenues.

But most importantly SplitGames manages to build a true vertical community on gaming. Each game has his forum and can be rated and commented. This creates a dynamics that will serve well the company in eventually achieving its ultimate goal: generate game trading.

To conclude, Swaptree’s approach is general, algorithmic and advertising based. SplitGames is vertical, premium and community driven. In my view the second approach has better chances to win not only because of its business model but mainly because users will feel they are part of a community where they can receive what they want and trade what they don’t want.

Let’s hope SplitGames will be soon available in English.

Swaptree will be different. First of all, any media can be swapped for any other kind of media. So I can trade the book I just finished for a DVD, or whatever. And Swaptree isn’t charging transaction fees. The site will support itself from page views. Users are responsible for their own shipping charges, however.

Swaptree is making it as easy as possible to conduct trades. To trade an item, all you have to do is enter the UPC or ISBN code on the back of the media and Swaptree fills in the details. And once you find someone to trade with, Swaptree will allow you to print out postage and shipping information right on the site.

Swaptree presents a compelling case for trading on their site, too. They say all you have to do is enter the item you want to trade, and you’ll be presented with “thousands” of items you can receive in trade. Their algorithm will also set up trades with up to 4 people, increasing the likelihood that you’ll see something you like.

So all that’s great, but something doesn’t smell right to me at Swaptree. First of all, trying to make a living on pageviews and advertisements will be tough. Lala and Peerflix don’t seem to be generating enough page views to support a company on advertising. I can see how Swaptree could be much more popular than either of those sites, but it may not be enough. Mitigating this, however, is the fact that their customer base will be primed for high end advertising – these people will obviously be ready to click over to Amazon and buy something on the spot.

But that leads me to my second, greater concern. Entering in an item and being presented with thousands of swap choices sounds great. I’m sure I could find things that I’d like to trade. But just how is that demand curve for my item generated? It seems to me that at some point in the process, I’m going to be asked what I am willing to trade for that item (if no one does this, there’s no way to create a market). And if I have to decide what I want and wait for that item to come on the market (assuming, with a stretch, that the person will want what I have to offer), well, it’s probably easier to just sell it on eBay and pick up whatever it is I’m looking for while I’m there. So what I see happening is that lots of people may be willing to enter their stuff in for trades, I don’t think that many people will take the time to say what they want to trade it for.

Maybe this is just a long winded way of saying that money does serve quite a nice purpose in our society, and eBay seems to have perfected the swapping market using that long proven currency of trade.

Sign up for the Swaptree beta on their home page.