“Amazon buys European movie rental service Lovefilm; Netflix shares fall on possible threat - Chicago Tribune” plus 1 more |
| Posted: 20 Jan 2011 10:36 AM PST NEW YORK (AP) — Amazon.com Inc. is buying Lovefilm, a European movie rental service akin to Netflix Inc. The deal announced Thursday heralds Amazon's entrance into a market where Netflix doesn't yet do business, and it left analysts wondering whether Amazon might mount a bigger challenge to Netflix in North America, too. Terms of the purchase were not disclosed. Lovefilm operates in the U.K., Germany, Sweden, Norway and Denmark. Much like Netflix, it is a subscription-based service through which people can rent movies by mail or watch them on TV or any other device with a high-speed Internet connection. The company also offers TV shows and games. Amazon already has an on-demand service that lets people rent movies by streaming. However, it does not send movies in the mail, as Lovefilm and Netflix do. Netflix so far only offers its service in the U.S. and Canada, with an estimated 19 million subscribers. Now that Amazon has a toehold in Europe, it might be more difficult for Netflix to expand there. Loveflim currently has more than 1.4 million subscribers. Netflix's subscriber growth has accelerated in the past two years, partly because its Internet streaming feature became more appealing as its availability expanded to video game consoles,Blu-ray players and a variety of set-top boxes that easily connect to TVs. Starz Media LLC gave Netflix's streaming library a boost in 2008 by licensing its movie catalog for a relatively inexpensive $30 million a year. Liberty Media Corp, Starz's parent company, is expected to demand substantially more money when that three-year contract expires in October. The price for the Starz streaming rights could rise even higher if Amazon decides to bid against Netflix — a scenario that Stifel Nicolaus analyst Benjamin Mogil believes is more likely now that Amazon has snapped up Lovefilm. "Although the service currently is European based alone, we would be surprised if Amazon did not have North American ambitions for the service," Mogil wrote in a note to clients. Netflix's stock fell $8.50, or 4.5 percent, to $182.37 in early afternoon trading Thursday. Amazon shares fell $4.36, or 2.3 percent, to $182.51. This entry passed through the Full-Text RSS service — if this is your content and you're reading it on someone else's site, please read our FAQ page at fivefilters.org/content-only/faq.php This posting includes an audio/video/photo media file: Download Now |
| Amazon Buying Lovefilm To Build European Movie Rentals Business - Yahoo Finance Posted: 20 Jan 2011 02:01 AM PST , On Thursday January 20, 2011, 5:08 am EST Amazon (NSDQ:AMZN - News) has finally confirmed it's buying the 58 percent of Lovefilm it doesn't already own - its bid to become a major European online movie subscription business. There's no price disclosed, but someone around the deal had been pumping The Sunday Times with a £200 ($320.31) million price tag for months. That was likely a ploy to flush out rival bidders before signing papers with Amazon - and we understand it to have been about the eventual sale price.
Lovefilm's pre-tax loss slimmed to £900,000 ($1441408.75) on a third better revenue in 2009, according to accounts, in which Lovefilm states online is now its "primary" business. But that's not yet true - though Lovefilm has 1.25 million subscribers, its biggest channel is still DVD, having grown up through the consolidation of a patchwork of smaller web-based DVD rental businesses. The service operates in the UK, Germany, Sweden, Norway and Denmark, and now offers web streaming, but has been taking this online service to the new and coming wave of connected TVs and boxes, like Samsung Internet@TV, Sony (NYSE:SNE - News) Internet TV and Playstation 3. Still, as we reported this month, Lovefilm's online repertoire, like its counterpart Netflix's, is just a tenth of its DVD catalogue, because rights are harder to secure. The company had to raise £10 ($16.02) million in debt to fund its online rights drive…
It's an opportunity that could see Lovefilm's fortunes catapult on these new TV platforms - but only if it can secure an A-grade movie line-up. An Amazon acquisition is therefore mutually beneficial - Lovefilm gets the money it needs to continue buying rights, Amazon gets the most promising company in the European field, as it looks to become a major movie, not just book, seller on both sides of the Atlantic. Balderton Capital, DFJ Esprit and Index Ventures had been Lovefilm shareholders, along with many of the founders of the companies on which Lovefilm itself was built over the years. Follow Yahoo! Finance on ; become a fan on Facebook. This entry passed through the Full-Text RSS service — if this is your content and you're reading it on someone else's site, please read our FAQ page at fivefilters.org/content-only/faq.php This posting includes an audio/video/photo media file: Download Now |
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