I should have mentioned that this plays on the Netflix model. And, with that, well, how long did it take before we had DVDs by mail? A longggggggg time. So yeah, there's the typical retail outlet for this stuff, you're right. And this market specifically is ginormous and will always be there. But there's currently no member of this market that's decided to go along with the Netflix model. And, at least to me, I see that as a huge opportunity.
Of course Netflix already abandoned the mail delivery model as their focus, they even tried to spin off that business, and it is only a small portion of their revenue today. There were a lot of factors that went into Netflix's success, including working closely with the USPS on rapid delivery, a terrific web presence, and catching the DVD market at a point when they were dropping in price but still a popular format for consumers. The window for Netflix was actually quite small (I suspect you are young and don't remember the time before DVDs) as DVDs were the most rapidly adopted media format in consumer electronic history, and are imploding at an impressive rate as well.
You've mentioned the Netflix DVD model a few times, so ostensibly you seek to offer some type of physical good via subscription?
Netflix's DVD model worked because everybody was used to renting movies from Blockbuster. The business model already existed: Netflix just did a better job of it and at exactly the right time. Will you have to change hearts and minds, or will you be simply "doing a better job than Blockbuster"?
It seems like you're considering some business that requires a lot of inventory, low margins, and high-operational costs. I guess I'm making a lot of assumptions.
EDIT: I guess I sound fairly negative. I'd like to add that I have a dear friend who manages to earn a decent living with a small internet-based video game rental service. It's a husband/wife team. They somehow managed to bootstrap the business, earn a loyal customer base, and maintain inventory in their apartment. They spend a few hours per day manually fulfilling orders, adding custom notes/suggestions to their customers, etc. It works quite well for them.
Sounds exciting. I would advise you to look into why the retail outlets are not using the model then. See if you can glean some points as to what they saw that keeps them out of it and see if you can come up with an idea around it. For example, if you look at the Netflix model it requires them to have several warehouses with several dvd's in stock constantly in order to meet demand. How could you alleviate this cost? Perhaps by offering it in a limited area initially.
