Online DVD clubs that promise a happy ending

Free deals, more films and no late fees; online DVD renters do better, says David Prosser

VD and video rental shops are so last century. For anyone tired of trekking out in the rain only to discover the store doesn't have the film you want to see - or anything else worth watching - an online rental service may be much more satisfying. This market has grown so quickly that LoveFilm, the biggest operator, is currently consulting advisers on a possible £100m stock market flotation.

While the first rental service was only launched in 2003, there is now no shortage of choice; more than 30 companies offer a package. Services such as Tesco DVD Rentals, easyCinema.com and WH Smith Movies Direct are actually powered by LoveFilm, but there are still almost 20 independent providers.

Most people choose a provider on the basis of price, particularly where a decent free trial is available, but it's also worth considering service issues. In particular, some customers of smaller services have complained about stock shortages, which can mean you don't always get the films you most want, especially if it's the big Hollywood blockbusters you're after.

Start by deciding which type of service you want. All the DVD rental companies operate on a similar model. You supply them with a list of DVDs you would like to see - 10 is quite typical - and you then receive films from this wish list, but with no guarantee of which DVD you'll get each time.

Unlimited services are the most common offering. With these, you can receive as many films as you want each month, but you're only allowed to hold a certain number at any time. You can hold on to the DVDs for as long as you want - there are no late fees to pay, one of the big complaints about high street rental stores - but you won't receive the next film on your wish list until you've sent them back.

Alternatively, limited services restrict you to a set number of films each month. Once you've received your DVDs, you won't get any more until the next month, however quickly you send them back. This may suit more occasional viewers, as prices tend to be cheaper.

Either way, you pay a monthly fee for the service. At LoveFilm, for example, the fee is £9.99 for one DVD at a time, £12.99 for two discs, or £15.99 for three titles. At Amazon, a limited provider, the fees are £5.99, £7.99 and £9.99 for three, four or six titles a month respectively.

The table (left) shows the best five services, as chosen by UK-DVD-Rental-Guide.com, an independent web site set up to rank the rental companies. The rankings are primarily based on price, but also reflect service issues, as reported on by users of the site.

Currently, the site gives its top rating to Blockbuster, having promoted it above LoveFilm last month. "Blockbuster has come a long way after re-energising its online effort in the past 18 months," says a spokesman for the site. "It's known for swift mailings, sending bonus discs for free, instead of charging an extra rental, and high stocks of new releases."

LoveFilm, meanwhile, has recently raised prices and the site says there have also been reports of service issues since it merged with its biggest rival, ScreenSelect, in October.

All the rental companies offer free trials, in order to persuade people to sign up. Typically, these operate for between 14 days and a month, during which time there is no fee to pay. You should have time to watch at least one set of DVDs and you can cancel the contract at no cost.

Martin Lewis, founder of the MoneySavingExpert.com website, points out that it is possible to use the free trials to avoid paying DVD rental charges for quite some time. "On the surface, this is simple - sign up for a free trial, use it, and then cancel and move on to the next," he says.

But in practice, Lewis admits this will only suit the most organised DVD buffs. "The terms and conditions of each trial can be harder to fathom than the plot of The Matrix," he warns.

There are several traps to watch out for with free trials. For instance, you won't be able to cancel your contract until you've sent your DVDs back. Also, you can't sign up for more than one free trial with each provider - all LoveFilm's branded services count as a single company, for example - and it's one free trial per household.

Even so, the trials are a good way to sample these services. And contracts can generally be cancelled immediately. So if you miss a deadline, you're only tied in for the following month, rather than an extended period. This also makes it simple to switch service if you become unhappy with the DVDs you're receiving.

One final issue worth considering is that all these services primarily operate online. Many do not even have a customer service phone line, which can be frustrating if you run into problems. The table shows which companies do take phone enquiries.

Cut cost of TV

* Millions of people may be paying too much for digital television services - particularly if they're also watching lots of DVDs. Satellite and cable TV operators have traditionally tried to sign people up for packages of channels. As a result of a form you signed years ago, you may well be paying hundreds of pounds for channels you never watch.

* Martin Lewis, of MoneySavingExpert.com, suggests leaving a notebook by the sofa and for viewers to keep a note of what channels they watch. After a fortnight, you should have a clear picture of whether it's worth paying premium subscriptions for sport and movie channels.

* In addition, you can use uSwitch (www.uswitch. com), the price comparison service, to work out which digital television provider would offer you the cheapest deal. Armed with your postcode and viewing preferences, it can recommend the best option.

* Lewis says haggle with your current provider before switching to a new type of digital television. "The market's increasing maturity means retaining existing customers is ever more important," he says. Always give your current provider the chance to match or beat a rival.

* Also, if you watch digital TV through a cable provider, it's likely you have signed up to a home phone package. These are often much more expensive than the cheapest home phone providers - you may well save money by switching to independent television and home phone services.