As I was working on the HustleSpace business models, one business model that came across the table was a DVD rental store. Now, we know that Redbox and Netflix pretty much took over the video rental game as well as streaming video and we also know that record stores have been obsoleted by streaming radio and iTunes. So with that said, having a DVD rental store in the hood may be obsolete but that does not change the fact we have a lot of DVDs and CDs still floating around as physical media. Instead of discounting the DVD rental store, can it be transformed using 21st century thinking such as circular economics? We discussed circular economics before where the goal is for people to change the focus from purchase of products to just utilization of products to encourage recycling and create a better economy by maximizing the use of collective resources. It occurred to me that we can probably use circular economics to take physical DVDs and CDs and create a 21st century streaming model in the hood. The thought is to create a server farm of DVD players that can play and stream DVDs and CDs to be remotely controlled by a customer. In this article, we are going to discuss the streaming DVD and CD business model using applied circular economics and how this business model can work in the hood. Let us know if you think this business can actually work. How a DVD/Streaming Operation Would Work The DVD/Streaming system will be setup as a server farm of DVD players and will be leased out to individuals to control remotely using their computer or mobile device. The DVDs and CDs are actually owned by the individuals and are not rented – this is very important to understand. When we say the customer owns the DVD, it means the DVD and CD is physically located at the business but the customer legally owns it. But here is the thing – the customer can own the DVD for a few hours while they consume the video or the CD of the album they are using and then sell it back to the store. So the DVD and CD can be bought and sold multiple times a day or a week and still remain at the same location. The only part is the DVD player has to be loaded and remove with the person DVDs and CD collections by someone or a robot and that is the real service, making the DVDs and CDs available for play. Hey, Is This Legal? An owner of media has every right to make a personal copy and resell their media collection. The legal problems occur when these digital media companies attempt to copy/distribute a copy of a recording and that is where they mess up. But if a person owns the physical DVD or CD, they can do what they want with it for personal, noncommercial use. Because only the customer can access their DVD or CD while they own it, that fulfill the personal definition and not a public broadcast. Now if a customer want to make copies of their DVDs or their CDs, they have the right to make their own personal copy and they can also resell their DVDs and CDs to someone else, like the streaming operation that sold it to them. This is why it is stressed to have the customer own the CD and DVD being played remotely and not rented, even if it is for a day or hours and this is documented. The Business Model The DVD/CD streaming operation go out and buy a new CD album or DVD that just came out for $14.99 at a store on release date. They sell that DVD/CD to a customer for $2.99 and place the media in the DVD drive that the customer control. The customer can watch the DVD or listen to the CD streamed to their mobile device and enjoy it. Then the customer can sell the DVD or CD back to the DVD/CD streaming operation for $1.99, meaning they loss $1 from the sale and the DVD streaming operation got the CD back $1 cheaper than they sold it. Take that $1 and put it in the bank. Now someone else buy the DVD/CD for $2.99 and sell back for $1.99 and put that $1 in the bank and keep selling and buying over and over again. From all the buying and selling, $1 goes into the bank. People can own a CD or DVD for a few hours before selling it back and that’s several $1 that goes into the bank. So the physical CD/DVDs are pretty much being sold/traded multiple times a day like this is the stock market and $1 is generated from the sales proceed. The Technical Setup The DVD/CD streaming operation can buy a DVD Server array that consist of a rack of DVD players that can be assigned an address over the Internet to a private address with private access. The DVD/CD can buy a bunch of DVD/CD collection both new and used and make available to purchase and play on demand. A good Internet connection is necessary to allow the customer to play videos and audio on demand. For the client, an open source system like XBMC can be customized to view what movies or albums they own are in the remote DVD tray. Then a database system and an application track the number of sales and transfer of ownership of all of the CDs and DVDs to keep track of ownership. What is the Risk and Challenge? The biggest risk is frivolous lawsuits by the movie and music industry to shut this operation down. But that will be a problem as this is a decentralized model that anybody can replicate and offer this service to anybody in the world. Another risk is a customer buy a brand new $16.99 DVD for $2.99 but don’t sell it until the demand is not there anymore. The way to cancel this risk is you are charging to lease the DVD player by the day. How to Get Started To launch this kind of service, build up hype creating a demonstration video to try to raise interest and money from investors. Once you see money and interest coming in, that is your signal to buy the equipment and get a building lease and internet connection. Then you want to get a collection of DVDs and CDs and you can buy used media or new media. Next is to make sure the XBMC client is there and setup to work as expected to play movies in an assigned DVD player and they can remotely control that DVD player from XMBC which can be ported to iOS and Android. Then the music and movie industry will try to get mad at you but you use that media attention to bring attention to your ego and fighting the system and you become famous as a result. Something to Consider One thing cats should have kept in mind is that this kind of streaming service can be done worldwide including Africa and Asia for example. This is a low-tech but highly effective way to offer streaming service in foreign countries versus having a big data pipeline running all the time. So cats in the hood should realize that we talking about this hustle not because it is only for the hood, but something that can grow worldwide if a cat want to go there. Another thing to consider is segmentation and clustering. Have one cat focus only on Black movies and another cat focus only on Korean Drama and another cat focus only on TV Series and Hip-Hop albums and they all can specialize in content. This prevent one cat trying to be everything to everybody and just watered down. In summary, reusing CDs and DVDs and having them sold multiple times a day or a week is a circular economic model that should be considered by a hood entrepreneur to take stuff we already have and learn to flip it into a bigger and better operation that can be global if they want. So tell us what you think about this business model and if circular economics will work.