Amazon acquires LoveFilm
Online retail giant takes full control
Move heralds Amazon's entry into European movie rental market
Amazon today took full control of DVD rental and online video company Lovefilm in a deal to buy the 58% of the business that it does not already own for an undisclosed sum. It claimed over 70000 titles and over 4 million DVD Blu-ray or game rentals per month in five countries.
The deal, announced Thursday, heralds Amazon's entrance into a market where Netflix Inc has already established a strong presence. Netflix, which launched in the UK in 2012, has over 40 million subscribers worldwide.
Amazon, the world's largest online retailer, has been rumored to be interested in acquiring Lovefilm for some time. The two companies have been partners since 2008, when Amazon began offering Lovefilm's DVD rental service to its Prime members. However, Amazon has been keen to increase its control over the company, and today's deal gives it full ownership. It is thought that Amazon paid around £200 million for the remaining stake in Lovefilm. The acquisition is expected to close in the next few months.
Conclusion
Amazon's acquisition of LoveFilm is a significant move that will give it a major presence in the European movie rental market. It is a sign of Amazon's growing ambition in the entertainment sector, and it is likely to intensify competition with Netflix Inc. It will be interesting to see how Amazon uses LoveFilm to compete with Netflix, and whether it can establish itself as a major player in the streaming market.
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