PUTTING A NEW STAMP ON MOVIE RENTALS

by James Keller

Tired of shelling out almost $20 a month to rent just a few new releases, Brian William Allaway has found a different way to rent movies: through the mail.

While more entertainment - from downloadable music to video-on-demand - is going digital, a host of new companies are busy licking stamps and tossing movies in the mailbox.

"It's kind of exciting because you get the joy of getting a useful piece of mail instead of getting a bill," said Mr. Allaway, 26, from Tantallon.

He joined Zip.ca, one of nearly a dozen similar services in Canada, just over two months ago.

After paying a monthly subscription fee, Mr. Allaway logs on to the company's website, selects movies he wants to watch and Zip.ca mails them to his front door, complete with a postage-paid return envelope.

Before joining, he said renting just three movies a month, with the occasional late fee, cost him a bit less than the $24.95 membership fee at Zip.ca.

"I got sick of paying so much," said Mr. Allaway, who now gets about six movies in the mail per month.

He's restricted to having four DVDs out at a time, but he can keep them as long as he wants without late fees, or return them immediately and rent new movies as fast as he can watch them.

Rick Anderson, president of Zip.ca, said the idea isn't out of step with the popularity of digital entertainment.

"As a matter of fact, this is part of the digital revolution," he said. "Before DVDs, you couldn't do this by mail because it would cost you a lot more to ship VHS (tapes), and they would get broken."

Following in the footsteps of online DVD rental services in the United States and Europe, a website called DYDHype.com started in early 2002. Within two years, versions have sprouted up all over the country.

It's difficult to size up the market for online rentals as none of the companies will reveal their enrollment numbers.

Mr. Anderson would only say that Zip.ca has mailed out 500,000 DVDs since it started in February.

Scott Glover, founder of Canada's second online rental service, Moviesforme.ca, only speaks in percentages. His company saw subscriptions increase by over 400 per cent between April 2003 and March 2004, he said.

Whatever the exact numbers are, they all claim customers are catching on.

"Our customer demographic is sort of broad," said Mr. Glover, adding that there doesn't seem to be a "typical customer" with respect to location, age, gender or family.

"We just get a lot of customers, whether they're new families with kids or whether they're business people that are traveling extensively who are looking for something to make life a little easier for them," Mr. Glover said.

Online services offer several advantages over what Mr. Anderson calls "bricks and mortar" stores. The movie selection is extensive (several services boast more than 20,000 titles), and you can browse any time of the day or night on your home computer.

Mr. Allaway agreed that the service is more convenient, but he still has to wait for the movies to arrive, which can take five days or more.

"The only major downfall is that you lose the spontaneity of going to the movie store," he said.

"If you feel like watching a comedy tonight, you can't necessarily get one."

There are no formal statistics to show how the new service is affecting traditional video rental stores, although Mr. Anderson points to U.S. figures that show growth only among online rental services.

"There hasn't been an effect on our stores," said Tom Michael, owner of Video Difference.

Mr. Michael compares the service to online clothing stores, which he thinks appeal mainly to customers who don't like shopping in malls.

Online rental customers, he said, probably weren't renting from his store, anyway.

"The Internet subscription service works well for the group of people who will never be serviced by a traditional video store," said Mr. Michael.

His only concern is the online outlets' ability to stock hard-to-find movies, which is his store's "claim to fame."

"If they're available online, people might want to shop online," he said. "To counter that, we just need larger inventory in our stores."