k wrote:

Enter Peerflix, which can be described on a basic level as eBay meets Netflix.

[ Decent idea. -k]

It's interesting that engadget acts as if they're doing original reporting on this topic, even though CNET also has an article on Peerflix today.

When you read the CNET article, they make it clear right up front that the 'news' angle is Peerflix CEO Billy McNair's prominent presence at this week's AlwaysOn conference.

Some weeks ago, I read a review of this service, which I can't locate at the moment. The reviewer found that Peerflix isn't really a market, it's a swap meet. So if you're making eBay comparisons, it's only applicable to the consumer-to-consumer side of eBay. In practice, if you "take a chance" on a film with low liquidity, there's a high probability you're going to get stuck with it, whether you wanted to keep it or not.

The value proposition for this service is flawed. In order to make it work, Peerflix needs to operate more like a used bookstore, where the store agrees in advance to buy back (at an advertised discounted rate) anything you purchased at the store. If you can find another customer, you can make a direct sale. But if you can't find a buyer for a DVD you want to unload, Peerflix should be willing to buy it back. The discount rate would be a function of the liquidity for that particular disc.