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Barter 2.0

The Times takes a look at the swapping phenomenon, using Peerflix and La La as examples:

[A]ccording to Billy McNair, chief executive of Peerflix, a DVD trading service based in Palo Alto, Calif. The company’s 250,000 members post titles of DVD’s they are willing to trade on the Web site (peerflix.com), which then facilitates the swaps by giving members printable forms that include postage and the recipient’s address.

Even though digital distribution is presumed to be the future for media businesses, Mr. McNair says he believes that physical media will remain the bedrock of the industry and of his business for the foreseeable future. About 1.5 billion DVD’s are purchased annually in the United States, he said, or about 20 a household. “And our members say they purchase more DVD’s now because they know that after they watch the movie it’ll still have value,” he said.

McNair's point is true for all products: the existence of an aftermarket—even a barter-based one—gives people an incentive to buy more.

They're nice, lightweight businesses, too: all they're providing is a database and the accompanying business logic to match users. The postal service handles all the fulfillment. As eBay will tell you, it's good to be a marketplace.

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