if we go to the video store, we end up renting like three movies and maybe buying one. plus the late fees now that our friend isn’t the manager anymore. we can’t afford to go to the video shop.

As for it being an opportunity for a family business, I don’t think this one would be a very good candidate. The startup costs would be huge, and even in the best case scenario you’d probably run at a loss for the first year or so. Add on top of that the fact that other larger companies are already on it and have more time and financial resources as an advantage, and it makes the risk pretty high, since I think with something like this there won’t be a lot of room for competition; there’ll probably be one company that emerges as the leader and the rest will fall.

As a matter of fact, I’m not even sure that it’s the right time (or if there is a right time) for this to succeed anyway. The key would be making it accessible to non-tech people, like the iTunes music store (as an example), because the tech-savvy people will be frustrated by the fact that they will always be able to download the stuff faster using bittorent (since it’s distributed and non-encrypted) without jumping through hoops like playing it on the right devices, etc. Again, I point to the music business as an example: it’s easier than ever to download music for free, but online sales are still successful in spite of that because they made it easier than the alternative for most people.