Amazon invests in online DVD rental company


5 Feb 2008

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Online DVD rental subscription service Lovefilm International has acquired Amazon Europe’s DVD rental business in the UK and Germany. Under the deal, Amazon Europe will also make a cash investment and become the largest shareholder in Lovefilm International.

The two companies are to enter into a multi-year marketing agreement which will see Lovefilm’s services promoted on Amazon’s UK and German sites.

Following completion of the deal, subscribers to www.lovefilm.com will increase to over 900,000 from the current 600,000, predominantly in the UK and Germany but also in Sweden, Norway, and Denmark.

“As one of Europe’s largest online DVD rental businesses, Lovefilm is well established to serve customers’ increasing demand for entertainment,” said Greg Greeley, Amazon’s vice-president of European retail. “Our investment will enable Lovefilm to grow the business further and we are excited to be part of their future.”

Simon Calver, CEO of Lovefilm, commented: “Customers are faced with an astonishing array of choices in the entertainment world these days. Lovefilm International will ensure that Amazon Europe’s customers get the best possible DVD rental service. This new, bigger customer base will give us an even better position from which to build Lovefilm as the best place for customers to find film.”

Amazon Europe will continue to operate the DVD rental business on behalf of Lovefilm for a period of time following the close of the transaction to ensure an efficient transition and smooth customer experience. No staff reductions are planned at Amazon’s German or UK operations as a result of the business transfer.

Lovefilm offers home entertainment packages that include unlimited DVD rental each month, free postage and no late fees in the UK, Sweden, Norway, Denmark and Germany. It has over 65,000 titles in its DVD range.

The company launched the first UK mass-market movie download service in December 2005, making 2,500 titles available to download to rent or download to own. The company has hinted at focusing more heavily on the download service following research that showed customers are interested in downloading more full-length films and TV shows, not video clips and short films.

By Niall Byrne

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