British Answer to Netflix Booms

By mattdentler | Matt Dentler's Blog October 31, 2009 at 7:44AM

British Answer to Netflix Booms
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There is no Netflix in the UK, at least not yet. However, there is LOVEFiLM, which serves a similar purpose. It's a subscription DVD service, which has begun a streaming option, and the adoption rate overseas has been very similar to the way Netflix has impacted the U.S. BusinessWeek and The Independent take a look at what's happened for LOVEFiLM, and where it may be headed:

The company has been pushing its digital streaming service for films and TV shows, launched in May, as the country faces more postal strikes. It currently offers 2,200 titles and 10 per cent of customers with access to the service have used it. The growth has come as rival services such as the BBC iPlayer have raised awareness of online viewing, although [CEO Simon] Calver warns that viewers will come to expect digital programming for free.

Mr. Calver argues that the DVD is nowhere near the end of its shelf life, saying: "There is no substitute for the choice and convenience of DVDs; it makes up the vast majority of our revenues." He believes the situation is unlikely to change over the next decade, despite Lovefilm spending much of time developing its digital business. "In the next 10 years there is going to be a hybrid economy that exists which is both digital and physical," he explains. "When the tipping point comes, where it is 50 per cent digital, nobody knows."

The company wants to bring digital streaming into every UK living room, and is in talks with "a number of consumer electronics companies" to develop a Lovefilm interface for television. Mr. Calver said: "Lovefilm is not about rental, it's about providing home entertainment," he says. "We are expanding our digital offering and, by the first half of next year, we will be appearing on the TV set."

And, much like Netflix in America, you can only use LOVEFiLM is you're living in its native UK.