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iLetYou.com - person-to-person DVD and Game rentals

iLetYou is a brand new service, launched out of San Diego on April 24th. Unlike traditional “swap-shop” services like Peerflix, ZunaFish or SwitchPlanet, or centralized rental systems like NetFlix, iLetYou (a) provides a platform to enable “casual renting” by individuals, to individuals, and (b) provides a platform for local video stores to do online rentals (more on this later).

Anyone can sign up and add movies or games from their collection (or inventory) to their iLetYou “store,” making them available for rental by others. You can set your own prices, and you can also set up bundles & bundle pricing for multiple-disc orders. Bundling encourages users to rent multiple discs from the same location, saving on the mailing overhead associated with online rentals.

Mailing is still a neccessity; You can supply your own packaging, or you can buy two-way disc mailers from iLetYou, which strikes me as a much better idea at 100 mailers for $24 .

Renters can leave feedback on those they have rented from; I’m not sure if stores can similarly leave feedback on customers (did they return on time? Did they ship back in quality packaging?)

Renting is a simple matter of searching and adding to your shopping cart.

Unlike many similar services (see SwitchPlanet, for example), iLetYou uses real dollars - you can add money to your account via credit card, which is then used to rent discs. I assume there’s a revenue cash-out feature for those doing the renting as well.

Business Model Musings

iLetYou has a straightforward transaction-cut model, taking a small bite out of each rental - SpringWise points to that fee being around $0.40 USD. Its the best of both worlds for iLetYou - they get the volume-revenue relationship of per-transaction fees, without incurring the same volume-overhead that - for example - NetFlix has; iLetYou essentially farms out infrastructure and inventory to individuals, paying for it with their rental-fee sharing arrangement.

The biggest thing that I see for iLetYou is the monetization of the corner rental shop. There must be thousands and thousands of these stores across North America, each sitting on hundreds or thousands of DVD’s and Games - a virtual inventory of millions of discs, which iLetYou provides the platform to aggregate. Its the perfect “long tail” play - iLetYou offers a way for these small stores to easily participate in the online economy, while also offering renters access to a potentially huge & diverse inventory.

On paper, iLetYou sounds like a disruptive business model - particularly for NetFlix. In the real-world, however, it faces the formidable challenge of marketing - making the service mainstream, giving it top of mind awareness, converting users from competing services, and ensuring quality transactions across the network will all be key. This is almost where I’d advocate a VC investment - seed money for marketing, help in crafting a marketing strategy, and access to VC’s networks of influence for deal cutting. Caveat: I’ve never dealt with a VC, or even met one - I’m just basing that suggestion on my understanding of the value VC’s offer to startups in terms of knowledge, money, and networks.

Suggestion

A quick one: Hook up with the DVD Catalogging sites. There’s a bunch of services out there that let movie fans & fanatics enter their collections online. A quick googling found Listology, Intervocative DVD Profiler, DVD Tracker, and My Movies. Build hooks into these (and similar) services to make it easy for their users to port discs from their collection over to iLetYou.

In Summary

If iLetYou can grow awareness and membership, it will have legs - until the market falls out from under physical media ten years from now (IMHO). Until then - it looks like a great alternative to existing options with the potential to shake things up for established players like Netflix.

Other Coverage

1. The Fox16 Geek Speek blog covers the highlights.
2. Andrew at AdvisorGarage has some hyperbolically positive coverage, also noting the risk from renting from unknown individuals.
3. RubyLearning talks about the Indian Rails shop that put together iLetYou.
4. 2livefools provide a good iLetYou overview.
5. The World Around Us covers iLetYou, and points the reader to SpringWise, who does the same.

apple, discs, dvd, games, iletyou, inventory, local video stores, movies, netflix, peerflix, ps2, switchplanet, xbox, xbox360 zunafish

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