The DVD rental by mail industry was pioneered by the US film Netflix, launched in 1999 to take advantage of the power of the internet and easy delivery of DVDs by post, while eliminating hated late fees. The UK market proved different, easier for startups because of the small geographical area and ease of swift post (by contrast, in the US it can take four days for discs sent from the West coast to reach the East coast--requiring nationwide companies there to open multiple warehouses--Netflix has 30+). Companies here can compete nationally with a single warehouse, given the generally high quality of the UK postal service. Companies claim that by using first class post, up to 90% of discs will arrive at a customer's door the next morning. Of course problems remain for the industry; we've heard one estimate that up to 1% of all discs get lost in the post each month.

After first gathering momentum in the UK in 2003, 2004 saw a massive market increase for British DVD rental companies, with explosive growth in 2005 and 2006 and expected to continue through for at least several more years. 2006 saw the merger of the two market leaders Screenselect and Lovefilm under the Lovefilm name, which now accounts for well ovr half of UK online rentals. However, bricks-and-mortar giant Blockbuster controls over a quarter of the market and has increased emphasis on its online division, with quality probably just as good. To give a sense of scale, market leader Lovefilm mails out over 2 million discs per month, over three times as many as just one year ago. The situation is similar to the late-1990s mobile phone craze, before the market reached saturation. Prices are low to entice new customers, and most services offer a free trial or at least a reduced price for the initial months.

The DVD rental market will probably continue explosive growth for at least several more years as it goes mainstream, driving many high street video shops out of business in the process. Screen Digest research indicates that by 2009, rental-by-post will account for nearly two-thirds of all British video rental transactions (and one-third of rental activity in Europe). By February 2007, Lovefilm alone controlled 23% of all DVD rentals from all sources. The exodus to rental-by-post will obviously hurt high street video shops, many of which will probably close, and may even imperil pay-per-view cable offerings. So enjoy the free trials and cheap subscription fees while you can.

We at UK-DVD-Rental-Guide.com will continue to guide the way with our reviews and rankings, helping you pick the best.

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