Peerflix

About Peerflix

Peerflix was a venture-backed consumer internet company founded in 2004 by Billy McNair and Danny Robinson, which aimed to disrupt the DVD rental market. Based in Palo Alto, California, the company operated a peer-to-peer platform where users could trade their physical DVDs with others online. The business model was centered around facilitating direct trades between members, eliminating the need for a centralized warehouse like its competitor, Netflix.

Revenue was generated by charging a fee for each transaction, initially 99 cents per trade paid by the recipient. To manage the value of trades, the platform used a credit system called "Peerbux." Members earned these credits by sending a DVD to another user, which they could then use to receive a movie of comparable value from someone else. This model allowed users to permanently keep the DVDs they received. The company raised a total of $10 million in funding over two rounds from investors including Battery Ventures and 3i Group.

The service officially launched in September 2005 after a year-long beta test, with plans to expand into trading CDs and video games. Co-founder Billy McNair, who served as CEO, brought a background that included a law degree, an MBA, and experience at companies like Spinway.com and PricewaterhouseCoopers. The company even pitched partnerships to retailers, suggesting they bundle free Peerflix trades with new DVD sales to help move inventory. However, Peerflix ultimately ceased its DVD-trading operations due to escalating operational costs and pivoted to an advertising-focused model called Peerflix Media Network, targeting a similar demographic.