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Woolies Moves Into DVD Rental

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Woolies Moves Into DVD Rental Woolies Moves Into DVD Rental Jun 15, 2007 By Greg Peel Supermarket and just about everything else giant Woolworths (WOW) has taken another step down the online path by becoming the first major retailer in Australia to enter the popular movie rental market. If you think this seems like a left of field move for the country's prime purveyor of milk and bread, consider that the precedent has already been set by Woolies' poster girl - Tesco in the UK. Tesco commenced a similar scheme in 2004 in collaboration with Europe's biggest online DVD rental outlet Lovefilm. It now boasts 500,000 customers and 20% of the UK rental market. In the Australian version, Woolies has teamed up with local DVD rental leader Quickflix (QFX). Quickflix' subscriber base has grown by 100% in the last 12 months and now has more than 18,000 customers. It is expected that by 2010, 20% of all movie rentals will occur online. Once Australia has a fast broadband network in place, rental will occur primarily as a download. However, we're not there yet. So in the meantime, the "online" part of the Woolies business, which it will operate out of its Big W division, means that you order your DVD of choice over the internet and it will be sent out to you by snail mail. Video-Ezy take note: there will be NO FINES. You just won't be able to order your next DVD until you've returned the first one. And there is no "pay per view' cost either - one pays a monthly subscription of $9.95. This snail mail business seems awfully pre-historical in the world of cyberspace, but one assumes Woolies is all set to gradually replace its mail service with direct download as that becomes possible with fast broadband. Quickflix can currently provide a selection of over 25,000 movies and TV series, "from the latest blockbuster to art house classics", as the blurb boasts, which is a helluva lot more than you'll find at the corner video store. Imagine the arguments. The company has already planned ahead for the next phase in DVD rental - downloadable video on demand (VOD). Quickflix announced a partnership on that basis earlier in the month with Australia's largest DVD distributor Magna Pacific (MPH) and digital media pioneer destra (DES). destra now owns 19.9% of Quickflix since swapping shares with LachlanFNArena Murdoch recently. The Woolies arrangement will no doubt be a bonus for all of them. And on the subject of the Murdochs, Lachlan's faith in the expanding digital age was again mirrored by his father who once confounded the critics by paying a fortune for MySpace, only to watch its value soar. Rupert has announced New Corp (NWS) will sell off nine of its FOX-affiliated television stations in the US for an estimated total of US$1.5-2bn. While this will help provide funds for the impending (possible) acquisition of Dow Jones, it is clear Murdoch sees little value in holding on to free-to-air, which is of Dow Jones, it is clear Murdoch sees little value in holding on to free-to-air, which is rapidly becoming obsolete. FNArena.
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