An interesting idea, a twist on NetFlix is Peerflix. It is a service where if you have ever traded a movie with a friend you already know the concept, but the pool of friends at Peerflix is much larger.

Peerflix Inc., an online peer-to-peer DVD trading service, today officially opened for business, ending a year-long beta test. This might seem odd given the Supreme Court’s recent decision to hold peer-to-peer file-sharing companies liable for users’ copyright crimes. But what Peerflix does is legal, for the time being at least: It enables the swapping of plastic discs rather than electronic files.

“At first when people hear Peerflix as the name, and they hear ‘peer-to-peer network,’ they immediately assume [it's] both digital and illegal,” says co-founder Billy McNair. “Because the ownership on our network transfers with the trade, it’s a fully legal environment.”

E. Leonard Rubin, an attorney in the intellectual-property practice at Sachnoff & Weaver Ltd., concurs, noting that what Peerflix is doing is protected by the first-sale doctrine under the U.S. Copyright Act. However, he observes, “This is something that is going to make the RIAA [Recording Industry Association of America] very unhappy.”

Subscribers enter the DVDs that they own (and are willing to part with) into the Peerflix database, which currently holds some 65,000 titles. They also enter the DVDs they want. The Peerflix system then matches the various offerings and requests. After that, users send requested DVDs to the designated recipients. And they receive the DVDs they want from other subscribers who own the desired discs.

A 99-cent transaction fee is charged for each DVD acquired, and there’s a $4.95 signup fee that includes five free trades. To each trade, add the cost of 37 cents for postage; there’s also the cost of ink and a piece of paper that will become the self-printed disc mailer.