Girl with the Dragon tattoo ... one of the films are available for Lovefilms subscribers to stream onlineAmazon took today full control DVD rental and online video company Lovefilm, in a deal to buy at 58% of the company, as it does not already own a released sum.
The world's largest online retailer has adjust to bid for a full stake in Lovefilm for some time, and today's deal is believed to value the business at around £ 200 m.
Amazon bought a 42% stake in Lovefilm in 2008.
"Lovefilm has to innovate on behalf of the movie rental customers across Europe for many years and with the advent of Lovefilm player, they are further delighting customers by streaming digital movies to their immediate enjoyment," said Amazon's Vice-President of European retail, Greg Greeley. "Lovefilm and Amazon have had a strong working relationship since Lovefilm acquired Amazon Europe's DVD rental business in 2008, and we look forward to a productive and innovative future."
LOVEFiLM will remain a leading player in DVD rentals since the launch in the United Kingdom in 2004, and has 1.4 million subscribers across Europe. The company tripled its sales in 2009 to almost £ 100 million, and in March last year launched its digital streaming service, enabling viewers to Rent and watch movies over the Internet.
The acquisition will be subject to European regulatory approvals and is expected to close in the first quarter of 2011.
Lovefilm chief executive, Simon Calver, said: "deal is a win for the members who love Lovefilm because of its value, choice, convenience and innovation in home entertainment
"With Amazon's unequivocal support we can significantly improve our members experience throughout Europe."
Within the last 12 months, Lovefilm has stepped up its movie streaming business, while leaving service its physical DVD rental continues its growth. Lovefilm announced in 2009 that online now was its "primary" company – despite online rentals, representing a 10th of DVD and Blu-ray rentals.
LOVEFiLM customers can now also stream movies over a number of internet-connected living room devices, including Sony and Samsung TV sets and PS3 games console.
Takeover bids conversations between companies means rushed when Lovefilm was reported to be approaching a public offering. Investers in Lovefilm include European venture capital firms DFJ Esprit, Balderton capital, Arts Alliance Media and Index Ventures.
Dharmarsh Mistry, a partner at the Balderdon capital, said today the acquisition was "great" for both companies. "Lovefilm is Netflix Europe, and it will be central to Amazon's European and global strategy."
Rise and rise of us movie rentals fixed Netflix, which have a market capital of $ 9.97bn (£ 6.23bn) – believed to be another leading cause of Amazon's Move. Netflix announced its intention to expand globally, with Europe and the United Kingdom a natural next step. Netflixs film library is believed to be nearly twice the size of Lovefilm 's.
LOVEFiLM was formed by the merger of two European DVD rental businesses, Arts Alliance Media and Video Island, in 2006. Two years later, privately owned Lovefilm acquired Amazon in UK and German movie rental business, with online retail giant takes a stake in the business world as a part of the deal.
The company now operates in five European countries: UK, Germany, Sweden, Denmark and Norway.
Saul Klein, a partner at Index Ventures and co-founder of Video Island, said process opens the door for a series of "mouthwatering Palatinate" integration opportunities with Amazon's existing assets, including movie database IMDB.
"When you get to the level of activity as a Lovefilm — makes £ 100 m in revenue, profitable and growing, not only in the United Kingdom – you end up having a lot of [future business] elections," said Klein.
"Amazon, will be one of the best ecommerce companies in the world has an incredible platform, including IMDB take Lovefilm to the next level and accelerate its growth.
"The great thing about Lovefilm is, it has been a stable and growing core activities in DVD by post, and, however, quickly [internet] streaming arrives, most people would say, there is still a pretty good long-term business in sending people DVDs through the mail."
"It is the customers, who shall decide on the go to digital or physical rentals – that's why we develop a hybrid proposition" Calver told the guardian. "We see no change in our strategy or approach, the basic things will accelerate growth. There are plenty of opportunities, but it is still early days, so there is no concrete plans and both companies see opportunities. "
Calver said, Lovefilm has seen "very, very strong" dissemination in streaming from video game consoles, which it introduced in March last year, but to physical rentals was also performing "safely" and "continued at pace".
Amazon's initial plans for Lovefilm is to continue to expand its presence on the internet-connected devices Greeley said, with Lovefilms European base complement Amazon's existing only U.S.-video on demand (VOD) offering.
Physical DVD rentals will remain an important part of the Lovefilms service under its new owner, he told the guardian: "as long as we offer a service across three fronts [streaming via game consoles, and internet rentals physical view], we are not concerned about cannibalisation."
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