DeansyActually - I think I do have it right. Are you sure you're...

Deansy

Actually - I think I do have it right. Are you sure you're not getting mixed up here?

EzyDVD has nothing to do with QFX

However, QFX is whitelabelling a postal+rental service for Big W

I am questioning how they will

a) initial fund it to meet the expected ratio of required titles

b) continue to fund it if it grows, given that it seems to take some 12mths to break a customer to even point from the low end plan. I am working on an assumption that a DVD costs circa ~$30 to buy ex studio, and has 12 rental cycles before it is too scratched to be of any use - so set up cost per title is $2.50, plus return postage of $1.50, or $4 cost base per rental

c) Given that Hollywood produces 20 new release per month on average, in order to have a 10% cycle rate between members

20 New Release x $30 each = $600 for ONE SET
to get 10% coverage of members (note 7 day return rate)

2000 "sets" of above = $1,200,000 for one months 'copies'

Given that they are spending nowhere near this according to 4C's - how many New Release titles does QFX actually have, and how long before "new" members realise that titles are based on a pyramid with a very thin wedge at the top - which will ultimately drive them away?

d) of more interest - how many customers have "free trialled" and never come back, probably for the above reason?

e) Whitelabelling works if you have "virtual" product like DESTRA's music store or RMA's movie downloads - I dont think its been done on physical product - problem is the inventory levels on New Release.