Peerflix nabs $8 million, now offers 100,000 DVDs
Peerflix, the online peer-to-peer (P2P) service that allows members to legally trade DVDs, said it has raised $8 million in venture backing.
The company, based in Menlo Park, said it has more than 100,000 DVDs for trade on its network.
The venture round was led by Battery Ventures, and Battery partner Roger Lee joins the board. Lee is the same guy who invested very early into Friendster -- long before it reached the height of its buzz. So he knows how powerful network effects can be -- but also how vigilantly a company needs to stay abreast of trends to avoid being eclipsed by others.
Here is our earlier stuff on Peerflix, written in March. Note that they'd already raised a first round back then, and they'd signaled that this latest second round was coming. So they are on track.
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Either the folks getting these funds are very smart or the investors are too dumb...I mean seriously..c'mon, there already are quite a few sites doing the exact same thing with min budget. Take a look at sharedevil.com for example.
Are these investors so eager to dump funds on any and every website they come across?
I know of atleast a handful of startups with brilliant-never-executed-innovative ideas but who are short on funds. May be they should be pointed to these people to learn a thing or two about getting venture capital.
mediachest.com, stuffopolis.com and delicious library are all similar and much more compelling ideas than peerflix. peerflix often doesn't work because you get stuck with ugly ducklings.
Just because a VC happens to invest in a particular company, does not make it a good idea (remember the one use DVDs and DIVx. The problem with this investment is that ANYBODY can compete with PeerFlix. They do not have a competitive advantage, say like Blockbuster with physical space or Netflix with breathe of inventory and infrastructure. Granted, those advantages could be a liability if a more nimble player enters.
I've used Peerflix for about four months now. I was really excited about it at first and told some friends. Then I began to realize how crappy the service was. There's a long wait to get any dvd that came out in the past year. The service which tracks the dvd availability is (deliberately, I think) misleading. The vast majority of dvds they have on their site are only available - I swear to God - if you buy them through Amazon. I've sent them email four times and never received an answer. Finally, a few weeks ago, I opted out of Peerflix. And they're still holding on to the $1.98 in my account - despite the fact that I don't owe them anything and they know it. My next act is going to be filing a complaint with the California consumer division. Over $1.98? Yes. Because they've pissed me off.