Online video library
An online video library is a video library that conducts business transactions over the Internet . As in a conventional video store, customers are mainly provided with video films and computer games.
Online video libraries use various business models, including rental , no-obligation purchase with a return option, and video-on-demand in the form of streamed content . Many online video stores mix these business models. The currently most popular business model is the legally regulated rental, as it is also used by classic video rental stores. However, rented or purchased videos are sent to the customer by post, videos on demand ( video on demand ) are shown live on the Internet.
Instead of business premises, an online video library uses an administrative unit and often several logistics units that store and pack video DVDs , integrate the postal service centrally and also receive the packing units returned by the customer. A web portal is operated to process customer contacts. An online video library that provides on-demand videos only consists of an administrative unit, since there is no movement of goods, but the entire rental process is handled by server hosting .
History of online video stores
The first online video library was founded in 1998 in the USA. The business model consisted of not lending videos (at that time still tape material ) exclusively via stationary business premises , but also sending them to the registered customers by post. This saved the customer the trip to the video store and offered a more practical selection of films via an internet portal. It was also possible to register online using a credit card.
International market development
The industry has developed very quickly, but in different ways internationally. Shipping operation conditions vary from country to country and depend on available customer bases, delivery routes, the size of a country, its population density, and applicable legislation. Cross-border deliveries may also be possible. The process depends, among other things, on the nationally different reliability and speed of the entrusted postal service as well as nationally different customer behavior.
Video delivery is well developed and popular in the United States . Most rental companies have developed a stand-alone distribution system made up of regional logistics centers that work with local postal operators. The largest US providers use it to supply customer bases with several million members. The range of different films per distributor is significantly lower, which is due to the greater specialization of the distributors. In particular, the areas of family entertainment, violence & action and pornography are usually strictly separated. Prices are generally lower in the US than in the European Union. The market is currently dominated by two competing large companies ( Blockbuster Video , Netflix ), each with many different brands that specialize in sectors. In addition, there are many smaller providers, some of which only ship regionally. The provider Walmart withdrew from the business two years after its market launch and is now working with Netflix. The Canadian market is significantly weaker and is dominated by the large company ZIP.ca.
There are numerous providers in Australia , including two major distributors, and three distributors in New Zealand . The range of films is very limited in these countries. Online rental started in India in 2004 and is now offered by several companies. The DVDs are sold through a completely dedicated delivery service, in which the containers are brought to the customer by a network of messengers. A postal distribution is not possible due to the enormous loss of shipments in India.
Among the European markets, the UK market is currently the strongest and also the most developed. Distribution is carried out by a single postal company that almost all distributors use. The distributor Lovefilm has consolidated the market with the purchase of the competitor Video Island in spring 2006 and works with supermarket chains, newspapers and media companies. Small purchased sub-contractors continue to exist as their own brand. They differ significantly in terms of price and film offer, but are supplied with DVD broadcasts by the same logistics units. The UK customer can order the same DVDs from the same owner on different terms.
Market development in Germany
In Germany, the history of online video libraries began in June 1999 with the establishment of the first DVD rental on the Internet under the name rent-a-dvd.de by Jakob GmbH. With the addition of games to the range, rent-a-dvd.de became verleihshop.de in January 2001. The online video library verleihshop.de is still one of the largest online video libraries in Germany. The rental shop belongs to the Jakob GmbH company. Jakob GmbH has been active in the rental and sales business of video films on the German market since 1981. In 2003 in particular, numerous other large providers followed, who quickly established themselves on the market. In addition, there were many smaller online video stores that are still working today or have been taken over by larger providers. Due to the sharp rise in logistics and acquisition costs for large providers, as well as the risks to be covered, none of the providers has been able to assert itself in the market. In addition, new smaller companies appear every year on the German market, which can deliver cheap offers (status 2007). The offers are very diverse and widely spread in terms of price and performance.
In 2006, large foreign DVD distributors entered the German market. The French market leader Glowria had taken over two large German DVD rental companies and also introduced a rental model under its own name. A first consolidation of the German market was initiated. The British market leader LoveFilm, also the largest European DVD rental company in terms of membership, also launched a German service in 2006.
At the end of 2007 and beginning of 2008, further consolidations took place in the industry. Glowria gave up its rental business in Germany and sold its brands to Video Buster, which consolidated a total of five major DVD rental brands under one roof and at the same time introduced a download offer. At the same time, the main Netleih portal was officially renamed Video Buster. Just a month later, LoveFilm announced that it would take over the DVD rental business from amazon.com . At the end of 2009 the rental shop took over the business of dvd-mieten.de and adultverleih.de.
However, independent figures on the market shares of the providers in Germany are not known. Information provided by the providers is available for whom it is not certain to what extent inactive customers or guest registrations were recorded. A British market research company carried out estimates in 2005 that were doubted by industry experts.
Despite the consolidation, unlike most other European countries and the USA, there is no supplier in Germany who dominates the market. The German market is considered reliable, handles mail with a small percentage of losses and treats DVDs with care. However, the customers are considered to be very price-conscious and calculate offers carefully.
Development of tariff offers
The modalities for shipping, price and service that can be selected by the customer are referred to as tariff . In the early days of online rentals, mostly flat-rate tariffs were offered. In the following years, the tariffs were often cut, mainly for cost reasons, so that almost only limited offers or offers with separate postage calculation were available on the market. In 2006, one of the largest German providers switched its offers back to flat-rate prices (the so-called “flat rate” model), and in 2007 other large providers followed suit.
Tariffs with long-term customer loyalty were not accepted by the German market. Customer behavior is very dynamic, and customers often and spontaneously choose another provider. The market is in constant motion. Tariff models are perceived sensitively and can be easily compared via the online offers on the Internet. High acquisition costs for video DVDs also mean that not all providers can include all films in sufficient numbers in their inventory. Small online video stores, in particular, weight their offerings on certain types of films and, for example, prefer to keep large numbers of new releases, documentaries or television series. Neither type currently offers any prospect of a consistent customer base.
The reliability of the transport company has proven to be an economic factor for online video stores with rental mode. If the number of DVDs sent to the customer depends on the speed of delivery (flat rate), the online video library can quickly lose some of its customers or gain many customers. Another important factor is the frequency of lost shipments, for which it is difficult to identify the cause (company, provider, customer) in individual cases. The loss is considered low in Germany, but is a major factor in the international arena. The liability in case of loss is therefore always treated as an important part of the contract. The German case law provides for the liability of the lender only for the outward transport, whereby the liability of many providers is voluntarily also assumed for the return transport, as this appears safer for the customer and consumer behavior has proven to be reliable.
As in the classic video rental industry, tariff models with deposits have not been able to prevail. The large German provider inVDeo, which worked with this model, had to file for bankruptcy in March 2005 , whereby the customers lost up to 200 euros in bail. The provider later resumed business operations under a new owner. Deposit requests are currently no longer accepted by customers and have been abandoned across the industry in Germany and Austria.
Business models
(Main articles: DVD rental , video on demand , purchase with return option )
By choosing an online video library, the customer also chooses the business model. It depends on personal needs and whether he wants to watch the films on his television, computer, over the Internet or whether he wants to rent or buy the films. There are currently three different business models, DVD rental , video on demand and purchase with a return option. Different tariff models are offered for each business model, depending on customer needs and technical necessities.
Tariff models
DVD rental with individual billing
In the case of DVD rental with individual billing , the customer selects one or more films that he would like to see - similar to a classic video store. He will then receive exactly the selected films by post. As a rule, films rented this way have a rental period of 7 days. The fees for the rental process usually consist of a fee per loaned DVD and the postage costs. Together with the DVDs, the customer receives a return envelope in which he can return the DVDs without incurring any further costs.
DVD dispatch with individual billing offers customers the option of receiving the films they want without having to wait because these programs have to be preferred by the provider for technical reasons. There is no wish list for individual billing, or it is very small so that the customer cannot be supplied with films from the lower ranks. For many providers, this is the most expensive tariff.
DVD rental by subscription
principle
Many DVD rental companies only offer subscriptions. The tariff model was introduced by the world's largest rental company, which has several million members in the USA. With DVD rental by subscription, the customer pays a fixed monthly amount for which he receives a fixed quota of DVDs. The DVDs can stay with the customer for as long as desired. However, he will only receive new DVDs in exchange when the lender has received DVDs that have already been viewed in the pre-paid envelope. DVD rental by subscription is usually associated with a wish list.
Flat rate ("flat rate")
With a flat rate, the so-called flat rate , the customer pays a fixed monthly membership fee and can exchange their DVDs as often as they want without having to pay additional postage or exchange fees. The fee is calculated based on how many DVDs the customer would like to have at home or in circulation at the same time. The exchange is not limited by the provider. However, the number of exchanges is limited in principle by the delivery time of the DVD from the lender to the customer and back, the duration of the exchange process for the DVD rental and the time it takes the customer to watch the DVDs he has received and return them to the DVD rental. If this tariff model is advertised with the keywords “DVDs, as many as you want”, the provider is obliged to mention the limitation through logistics and waiting times on his web portal.
Customers who return their DVDs quickly prefer the flat rate. The number of DVDs received per month is not fixed and varies. From the point of view of the rental company, there are customer groups who take full advantage of the flat rate and groups who take their time. Fast customers are often cross-subsidized by slow customers . This mainly affects the postage costs, which make up a considerable part of the fee. A single customer belongs to different groups depending on the month, depending on how much they want to see in that month. Whether a lender can offer a flat rate also depends on whether this cross-subsidy can be balanced over time.
Limited offers
With limited offers - similar to the flat rate - all postage and exchange fees are already included in the monthly membership fee. However, the number of exchanges or DVDs per month is limited to a contractually agreed number. As soon as this number is reached, the customer will no longer receive deliveries in the current month, or additional exchange fees will be charged.
The limited offer sets a predictable number of DVDs. Customers don't have to quickly return the DVDs. Because the number of DVDs received per month is often no less than with the flat rate, but the customer retains a better overview, this model is competitive. There is no cross-subsidy between the customer groups for the lender unless he has an additional flat-rate tariff on offer.
Offers with separate postage calculation
For offers with a separate postage calculation, the number of possible exchanges is unlimited, as is the case with the flat rate. However, a postage, service and packaging fee will be charged for each exchange made. No cross-subsidization between customers is possible here, which is particularly attractive for customers who lend little, as they can determine the costs themselves with a low basic fee. For customers who borrow a lot, this tariff model appears less attractive because they are not subsidized.
Lenders with this model polarize themselves on a certain, low-lending customer group, which is considered to be more contract-stable and reliable. Customers with this rental behavior do not cancel their membership as quickly as the basic fee (between 3 and 13 euros) is low and is still paid in months of non-use.
Rental rates with leave of absence
Regardless of the tariff model, many rental companies offer to take leave of absence from a user account if the customer enters this in their user settings on the web portal. For the period of leave of absence, shipping will be completely suspended regardless of the wish list and other features and the collection of fees will be stopped or reduced.
In this way, the distributors are reacting to the time fluctuating need of customers for video films. A termination is not necessary if the customer would like to obtain films that are not in the distributor's inventory from another distributor. The strong change of customer bases is thus reduced. This encourages customers to register multiple times with different distributors.
Above all, the leave of absence / parking of accounts contributes to the statistical confusion of the market, since customers on leave are included in different calculations or left out. Multiple registrations are also difficult to estimate.
Rental rates with firm customer loyalty
Firm customer relationships for a longer period are not well received by the German market. Contracts to one or two years maturity are designed and oblige the customer for acceptance are rarely offered. Some rental companies advertise a discount to customers if they choose a minimum period (1, 3, 6, 12 or 24 months), but allow cancellations at certain times.
Tariff models for video on demand
(Main article Video on Demand )
With the “video on demand” business model based on the “pay per view” principle, the customer pays to be able to watch a film by downloading or streaming.
Video on demand for individual billing
Almost all “video on demand” providers have so far billed individually. A fee is payable for each film viewed, which is deducted monthly by direct debit.
On-demand video when the number of pieces is limited
The on-demand video with a limited number of pieces provides the customer with a certain number of video films that he can call up for a basic fee. If the upper limit is reached, the customer must wait for the next billing period or choose the next higher tariff offer.
On-demand video at flat rate
With the flat rate, the customer has the option of viewing any number of films for a fixed monthly fee via online stream. This tariff is currently only in the trial phase and does not offer the customer a satisfactory offer.
There are basically two forms of flat rate. Unlimited in time and unlimited in number.
On-demand video with category limitation
With the category limitation, the customer can only see films from a certain category or genre, regardless of further agreements. The division limitation is mainly due to legal reasons, as the distributor has to pay a very different user fee to the rights holder for each film. Popular, current or successful films differ greatly in price from old films or those that are aimed at a small, specially interested group of customers.
Purchase with a return option
In the EU, every customer of a commercial retailer who ships their products online has the option of returning these products without giving a reason. The basis here is the fact that a customer cannot inspect the product when buying it online and any defects or incorrect ideas remain undetected when buying it. The customer is always entitled to the return option, whereby the retailer is not allowed to charge any additional price beyond the postage. A DVD dealer can interpret this provision in favor of the customer.
With this business model, the customer basically "orders and buys" every item that he orders from the dealer and pays the purchase price plus postage. High order values are the rule. However, the retailer offers the option of viewing the article on a trial basis for up to two weeks (statutory period). There is no undamaged packaging. If the customer likes the goods, he keeps them. If the customer sends the goods back on time, the purchase price is fully refunded and only bears the shipping costs. In order to keep account movements to a minimum, the dealer maintains a virtual account on his website that has a credit limit to be determined by the customer and which can also be overdrawn. Accounts typically run between 50 and 500 euros, depending on how many items the customer would like to have "bought" at the same time. The trader adds up a (often low) basic fee, purchase prices, credits and postage fees to this account. The sum is billed to the customer monthly with a single bank transaction.
The number of products sent at the same time in one mailing is set high, the frequency of postal contacts can be determined by the customer himself. The model can be used by high-seeing customers and also makes it possible to keep the films easily (not to be sent back with the other copies). Some providers reduce the purchase price if the customer keeps a DVD that has already been used by other customers.
This model requires advanced software, as customers have to enter many options, in addition to the condition of the goods ordered (new goods, used), information on the frequency of dispatch, virtual account management, packaging requests and other things. The business model is so effective that the rarer but larger shipments can also be returned by the customer by registered mail, which greatly minimizes loss and damage on the transport route. A disadvantage of this model is the reluctance of those customers who perceive larger amounts of virtual money to be risky.
General rental process
Depending on the business model, different rental channels are used, which are also combined by individual providers. Classic DVD rentals and sales with a return option send DVDs by post. The on- demand video is a more modern form of distribution that eliminates the need for post.
Post
The rental process begins with the mailing of DVDs to the customer, which can then be delivered to the customer via the post. The DVDs are packed in a container - usually a specially designed envelope - that can hold one to six data carriers, depending on the provider. The customer removes the DVDs and consumes their content. Then he packs the DVDs back into the container. The container used is usually a special envelope that can also be used for the return shipment. To do this, the part of the envelope on which the customer's address is printed is simply torn off and the postage paid back and the return address appear underneath. Some online video stores also include a separate envelope with the shipment. The customer then throws his shipment into a post box . The consignment returns to the lender, with subscription models the customer receives the next container in exchange. With some providers (such as DVD-Mieten.de), the return is requested by registered mail .
Retrieval
The delivery of videos via the Internet, video on demand, has so far hardly played a role, both due to a lack of films and due to high costs and restrictive digital rights management . However, this distribution channel is planned by many online video libraries, because a much more effective distribution system can be built with it.
When retrieving the data, the customer logs into a web portal where he can see the videos on offer. With a click of the mouse he receives a live stream. Some providers only make the films available at certain times. For example, a desired movie starts every 15 minutes. This relieves the provider, as he does not have to switch a separate stream for all customers who want to see this film that evening.
Offer and provider
Online video stores generally have a very large selection and also include films that are rarely rented out in their programs. A film is often included in the program at the customer's request. There are around 20,000 loanable titles on the market in German-speaking countries. Online video libraries usually offer between 8,000 and 20,000 titles. In addition, video and computer games are also rented out, but often by distributors who have specialized in this market, are offshoots from DVD video stores or use their logistics.
Online video libraries are usually limited to individual countries, which reduces the supply of foreign films.
Current providers
- Germany
- Prime Instant Video, Amazon.de (formerly LoveFilm Video on Demand)
- max cathedrals
- Verleihshop.de
- VIDEOBUSTER.de (formerly net rental)
- Video load
- Vodafone video library
- Movietick.de
- Netflix
- videociety.de
- Austria
- VIDEOBUSTER.at
- Conrad DVD-World
- DVDek.com
- myDiViDi
- Conrad rental (powered by Verleihshop.at)
- videociety.at
- Switzerland
- VIDEOBUSTER.ch
- dvdfly.ch
- dvdone.ch
- 1Advd.ch
- DVD ausleihe.ch
- Xrise.ch
- DVDIBE.CH
- NetMovies
- DVDSTAR
- DVDrental
- filmexx
Customer contact and communication
The communication between the online video library and the customer takes place exclusively via a web portal of the lender, on which the registration of new customers takes place, stating personal details and account details , as well as the transmission of access data and logging into the member area, the choice or change of a tariff model compiling a wish list if necessary. Communication also includes the often very detailed information about the films as well as special offers , promotions and the latest releases.
Most rental companies do not offer any other contact options such as telephone queries or personal visits or limit these to special individual cases such as clarifying lost shipments or company tours.
Web portal
The web portal of an online video library is based on a database in which the changes made by customers in their user accounts are saved. The operational departments also access this database, for example to carry out shipping and payment.
The web portals of many online video stores often provide additional information, allow viewing of trailers , advertisements and background information. The company's web portals differ greatly in terms of user friendliness and functionality.
Wishlist
The wish list is a special feature of online video libraries that offer memberships or subscriptions. Since the customer here immediately receives a new DVD in exchange as soon as a DVD returned to the online video library arrives there, it would be too cumbersome to ask each customer to name the next desired title each time a DVD is received. Instead, the customer creates a wish list with several films that he would like to receive in the near future. Each film on the wish list is given a rank . The customer would like to receive films with lower ranks or upper positions as soon as possible. However, the customer has no direct influence on which DVD he will receive next.
If the company has only one warehouse, customers are continuously supplied one after the other from this warehouse, with each customer being sent films from the upper tier of their wish list, if possible, until these films are no longer in stock. Then the dispatch from lower ranks takes place until films in the upper ranks have again arrived at the warehouse.
With more modern organization in several interim storage areas (entry storage, main storage), it is possible to carry out a so-called match run with the software, whereby the titles are evenly and fairly distributed to the customers based on many parameters. The aim is, on the one hand, to supply as many customers as possible and, on the other hand, to pay close attention to the wishes and rankings of the customers. Each customer then receives, for example, mixed high and low ranks on his wish list. The match run also takes into account whether the customer has ordered a series and will receive DVDs of this series one after the other.
A minimum length is often prescribed for the wish list so that the dispatch to the customer does not come to a standstill if the upper ranks of the wish list cannot be sent because they are currently being seen by other customers.
The basement of the wish list is the term used to describe the lower ranks, which are often filled by the user with less attractive films so that the wish list does not fall below the minimum length. Programs that are put together by the distributor with videos from the basement are unpopular with customers. Cellar dispatch occurs more often when the lender has logistical problems.
Most online video stores give the customer feedback about which DVDs are currently where (way there, way back).
service
Most online video stores have customer service that can be used to answer any questions. Questions about tariff models, reports of lost programs or customer inquiries about films to be purchased are processed through it. Depending on the provider, e-mail , internal messenger systems or ticket systems are used for this. Input masks are often offered for this purpose, which presort the messages and forward them to the responsible person. Depending on the provider, communication can also be maintained with customers who are on leave or who have dropped out in order to facilitate resumption of deliveries. Most rental companies send out regular newsletters and provide information about new releases, changes in tariff offers or important company news.
Cost and payment
The costs for the service are collected by the lender by direct debit , bank transfer or credit card payment. For security reasons, a manual transfer is sometimes required from the customer for the first transfer so that misuse by third parties can be excluded. The contract is concluded after the customer has identified himself with this transfer.
Many lenders keep an internal account for the customer, which is balanced monthly with a bank transaction or brought to an agreed level. This occurs with tariff models with changing monthly amounts.
Reviews and customer forums
Many online video stores allow their customers to write reviews of the films they have seen. The reviews are often checked manually for vandalism before going online. Some rental companies offer other customers to rate the reviews.
Lender forums are unusual for practical and legal reasons, but are often created or used by customers themselves.
Establishing an online video library
An online video library consists of an administrative unit and one or more logistics units.
administration
The administration organizes the acquisition of new films, customer data and the web portal. Contracts with postal companies and suppliers are made.
Stock
The inventory of an online video library is an important economic factor and ties up a large part of the working capital . The number of copies of DVDs purchased per film must be carefully calculated. A distributor who purchases a large number of copies of current films can satisfy their customers at short notice and has a reputation for being able to deliver current films quickly and reliably. However, this carries the risk of building up a surplus of DVDs as soon as the films are no longer up-to-date and fewer customers order them. The inventory becomes obsolete and ties up capital.
On the other hand, a stock that holds many different films in stock in only a few copies is unfavorable for some customer groups because they have to wait a long time for new releases. However, the distributor has the advantage of being able to offer more titles and fully utilize the operational life of the DVD.
The composition of the customer groups can be controlled via the composition of the inventory. Most of the major online video stores have a mixed strategy in building inventory or are trying new approaches on short notice. A far-reaching stabilization of the customer base is not possible through any strategy. In any case, customers tend to abandon providers who cannot fulfill their needs.
logistics
The logistics of online video stores require a complicated interaction between software, technology and transport companies.
As soon as Swiss Post has delivered the return to the lender, the containers are opened, the DVD is removed and booked back. The re-booking of the DVDs is usually carried out using a barcode that is either attached to the DVD or on the envelope and is read in manually or using specially designed machines. At large online video libraries, several thousand programs are booked back per day.
Organization of circulation
When circulation is called the way how individual DVDs in the warehouse and from the warehouse to the post, to the customer and be returned. If the company is to work effectively and leanly, i.e. using the entire inventory as possible, circulation must be well organized.
A simple method is to sort incoming DVDs into a single large warehouse, from which the employees also continuously remove DVDs and send them to the customers. The employees immediately start packing DVDs in the morning and keep the process going while other employees unpack incoming containers and sort them into the warehouse. With this form of circulation, the inventory and customer orders cannot be optimally compared at all times. There must be enough DVDs in stock at all times to be able to continue packing even though the next postal delivery has not yet arrived. These copies that are in internal circulation are not fully used and form an inactive loop that has to be compensated for by higher numbers of new purchases. As soon as a film is ordered by customers less frequently, there is also an increased inventory surplus and thus more dead capital following increased new acquisitions . Working with a single warehouse is therefore ineffective, but it has the advantage that a single DVD is a little rarer with the customer and thus the inventory wears out more slowly. This method is rarely preferred. It can be useful for small lenders and for lenders with the buy-return model.
It is more effective to use an intermediate storage facility that contains all active DVDs as a buffer. In the morning the interim storage facility is completely empty. The employees wait for the delivery of the carrier, first open all postal deliveries and process them as quickly as possible but completely to the interim storage facility. Then it is clear which DVDs have come back. Only after all DVDs have been booked back can a match run determine which customers should receive which DVDs with the next delivery. This is done automatically using software programmed for this purpose. This decides which DVDs that have been booked back will be dispatched immediately from the interim storage facility, which DVDs must be sorted into the main warehouse and which DVDs are required in addition to the DVDs that have just been booked back from the main warehouse. Then the new shipments are populated, depending on the provider either individually in a separate envelope per DVD or with several DVDs in one envelope. Finally, the envelopes are usually sorted by postcode by the lender and then picked up or brought to the transport company. At the end of the working day, the interim storage facility is completely emptied. If individual components fail, there may be delays in the operational process.
Some DVD lenders deliberately delay the circulation by a processing time agreed upon when the contract was signed. With a processing time of one day, the new DVDs will not be sent to the customer on the same day that the old DVDs arrived at the lender. This is associated with a longer waiting time for the customer. The lender can keep the surplus to a minimum because he has an extra day to distribute the DVDs to the customers. Customers find the offer less attractive, although the waiting times - especially when shipping containers with multiple DVDs - need not be increased.
Logistics and customer behavior
Online video stores do not have a stable customer base because customers do not depend on local stores. Shipping DVDs is a market in which customers switch providers very quickly. Switching is easy. In the event of dissatisfaction due to late or inadequate deliveries, parts of the customer base tend to suspend the loan and thus the payment (leave of absence) or cancel. Therefore there is a risk that is difficult to calculate even for large rental companies and it always remains uncertain whether a stored item of DVDs will recover the costs. Cross-financing between sales through individual films is the rule.
On the other hand, an online video library can quickly acquire a large number of new customers and grow by leaps and bounds thanks to its reliability, low prices and good offers. However, too strong growth is also fraught with risks, as it can lead to excessive demands on logistics and longer delivery times. If the number of new customers increases very quickly, it is no longer possible to supply all customers with the preferred films at the same time. The inclusion of necessary refinancing to expand staff and inventory is also fraught with risks if the sudden increase cannot be stabilized on a permanently increased customer base. Values acquired for a short time cannot then be written off. Most rental companies therefore value a steady and calculable increase in sales that takes into account specific customer behavior.
With modern and popular tariff models such as flat rate , the customer is allowed to borrow as many films as is technically possible and reacts sensitively if a long time elapses between booking the old program back and canceling the new one. Logistics therefore works under great time pressure and cannot suddenly be switched to another operating mode. Changes in warehouse management and personnel are therefore preferred when a new logistics center is set up, which will work with a more effective method after its completion and can bridge any bottlenecks in the old center. Thanks to a database that can be viewed by all connected centers, deliveries to customer groups can be specifically divided without the customer having to wait. In the case of delivery of containers that only contain a single DVD, the customer can also be supplied from two different centers, provided that one center does not keep a rarer film in stock.
Advantages and disadvantages of online video libraries
For the lender
The lender has the advantage that he does not have to set up a branch network, which saves a lot of time and money. On the other hand, building a large warehouse requires a large investment. As with other logistics companies, depreciation can only be carried out once full operation has started. In addition, high investments may be necessary spontaneously if the customer base increases by leaps and bounds, as can occur when changing your own tariff offer. However, changes in the tariff range of competing online video libraries regularly lead to falling sales figures.
There are a number of typical pitfalls and sources of error in operational processes, such as pallets that are temporarily overaged or behavior in the event of bottlenecks or a strong backflow of DVDs after holidays.
For the customer
Compared to traditional video libraries and machine video libraries, there are two main advantages seen in connection with online video libraries. The main advantage is the convenience of regularly receiving DVDs in the mail or being able to access films online without having to go to a stationary video store. Furthermore, online video libraries in the DVD rental sector usually have a much wider range than a single stationary video library. Some large German providers have up to 20,000 different titles in stock and claim to include every German loanable title in their offer. On the other hand, there are weaknesses especially with older titles that are difficult to obtain or cannot be recovered if a DVD is lost or damaged. There is also no possibility for the customer to borrow media at very short notice, for example for a spontaneous “DVD evening” on the same day.
One disadvantage of the postal service is that items can be damaged or lost. So far there have been different views on liability. Many online video stores currently assume the transport risk on the way there and back, but reserve the right to investigate at the customer's expense. Customers who appear unreliable are sometimes excluded. This also applies to customers who live in regions where shipments are frequently damaged or lost. To avoid problems in the event of loss, transport insurance is occasionally offered. These disadvantages do not apply to video on demand .
Individual evidence
Web links
- Video rental - if nothing works anymore, you do everything (article on Spiegel online)
- DVD flat rate in Germany (article on Spiegel online)
- Internet video libraries - a good movie night with just a few clicks of the mouse (article on Welt online)
- Information portal on the subject of online video stores