DVD upstarts carve out niche businesses

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Blockbuster carry. Other rivals offer mainstream titles but distinguish themselves with different business models such as Peerflix's facilitating swaps of subscriber-owned discs, or DVD Overnight's no-subscription rentals.

The most successful DVD upstarts have focused as much on community as on content, however.

Greencine's catalog cuts across a handful of niches, ranging from anime to early Japanese to Italian horror. It maintains a large catalog of adult films, and Phillips said these account for a considerable, but not dominant portion of its business.

But the company drives much of its traffic through blogs and newsletters written by its staff of editors. On virtually every page are links to lists of favorite films created by users, which the company says has helped create a critical sense of participation by subscribers.

"People feel like there is someone behind the curtain," Phillips said. "People can be part of a film community instead of just someone renting from a big faceless corporation."

Not that these businesses have always enjoyed smooth sailing. Both Phillips and Field said their companies' first years were full of bumps that tested the patience of early customers. In RentAnime's case, customers complained bitterly for months about slow mailing times, caused by unforeseen glitches in the local Tampa post office. Those have since been corrected, Field said.

Several are already toying with the video-on-demand services rumored to be coming from Netflix and others. Greencine offers thousands of on-demand movies through its Web site and plans to move more heavily in that direction during the next year, Phillips said. Many of the early titles were adult movies--largely because their copyright owners proved quickly amenable to the on-demand model--but the catalog is now being expanded with independent and foreign films.

Field also says he's planning to move his anime service into the on-demand model as quickly as the Japanese companies that own the rights to the works allow. Just as he transformed his community Web site into a store and his store into a rental service, impetus toward the next step is already coming from the fans, he said.

"The market is changing so fast," Field said. "But the growth of the Internet and the growth of anime has really worked in our favor."

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