Peerflix, What Have you Done?

Wow. The old Peerflix is gone. The new one is…not so appealing to me.

With the old Peerflix, I felt I was buying DVDs for $1.50 each (99 cents to Peerflix plus 51 cents postage)—much less than the cost of a rental at Blockbuster. The Peerflix trading currency, “Peerbux,” was like Monopoly money. Perhaps that was an illusion, but it worked for me.

The new Peerflix is all about real money. You buy DVDs for real money. You sell DVDs for real money. I never did that before. I don’t think I want to do it now.

So if I want to see, for example, October Sky, I now have to buy it for $9.50 on Peerflix. I’m wondering, is October Sky worth $9.50 to me? If it were only $1.50, I would pay that in a hearbeat. But if I have to pay $9.50, why don’t I just go buy it on eBay, where I know exactly when I will get it and what condition the disk will be in? (It looks as if I can get a brand new one on eBay for $9.74 including shipping.)

I gather from Michael Arrington’s Techcrunch post that the old Peerflix barter system just wasn’t working. Arrington’s prediction for the new system is that it won’t work either. Arrington writes:

Market economies work (see eBay), but Peerflix didn’t adopt a market system. They ditched a barter economy for a command and control system, where Peerflix uses a proprietary algorithm to determine the value of a DVD. That won’t work – eBay will always have a more efficient system for quickly equalizing supply and demand. Peerflix will constantly be tinkering with their pricing algorithm, while eBay lets its users do all the work.

He continues:

This is easy criticism to give, but in reality Peerflix couldn’t adopt a market pricing system. If they had, there would be little to distinguish them from eBay to keep users going there.

Here, I have to disagree. From a buyer’s perspective, the fact that Peerflix limits the shipping and handling to $1.50 is a great start. Also, from a newbie seller’s point of view, Peerflix is much easier. You don’t need Paypal. You don’t even have to buy stamps or envelopes. There is plenty wrong with eBay that Peerflix could improve upon (see my previous post on that). So here is an idea I’ll give to Peerflix for free: switch to an auction system. Copy the auction interface from the old EA video game, M.U.L.E., by Dan Bunten, and provide nice graphs of the historical market price. That will turn Peerflix into a fun, low-stakes commodities exchange.

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3 Responses to “Peerflix, What Have you Done?”

  1. khudari Says:

    I got this question via email from Matthew P.:

    Why is the cash economy so confusing? You still only pay $1.50 for a DVD. The cash economy juts allows people to cash out if they want to leave. They couldn’t do that with Peerbux.

    Here is my response:

    The cash economy is not confusing at all. It is buying and selling—very clear. However, the psychology of buying and selling with $1.50 shipping cost is totally different from the psychology of trading a few of my discs for a few of someone else’s discs with a $1.50 transaction fee. This may be irrational, but it is how my psychology works.

    I never bought DVDs until I joined Peerflix. They seem too expensive, when you can rent them for $4. I know–irrational. But that thinking prevents me from pulling the trigger.

    I am reluctant to try selling stuff online because I am worried about unhappy customers complaining about lost or damaged items, etc. It feels like too much hassle–especially for small stuff like DVDs.

    By the way, with the old barter system, I would never complain about receiving a very scratched but playable DVD. But if I paid real money, I might feel ripped off. I would also be uncomfortable passing a very scratched DVD on to the next unwitting customer.

  2. R. J. Fujan Says:

    I agree that the barter system was much better. But my biggest complaint with the new system is that you now have to have a credit card on file instead of using PayPal. When they had my credit card before, I’d receive so many DVDs at once that I could not possibly enjoy them and my bill could be as much as $50 a month! By using PayPal, I could control the maximum number of DVDs I received each month, thereby controlling my spending instead of having Peerflix control it. Also, the price conversion they used is suspect. From the forum, it appears that most users ended up with odd amounts of “cash” in exchange for their Peerbux, because the price they used to convert is not only below the lowest priced DVD in the system, it’s also in odd cents, unlike the prices for the DVDs, so you’ll always have change in your account. As for “cashing out”, be prepared to wait FOUR months to get your money!

  3. beth Says:

    peerflix ripped me off

    i loved peerflix, i sent and got hundreds of decent dvds. then, the big cash out promise… with $450 credit, i was elated to think, “ca-ching!”

    boy was i stupid. after 3 months, i got a check for $6 (six) dollars. after a few back and forth emails with the peerflix-peeps, they explained how i used up all my credit on the 65 dvds that had been rapid fire sent to me (average $7). the maddening thing, there was no easy way to deletew from the “want list” so the disks kept flying into my mailbox.

    anyway, the new system is not so great and i’ll keep checking back with them, but, that’s enough for me. customer support has a real cold attitude, probably from all the complaints they’ve been fielding.

    oh well,
    beth

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