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January 21, 2011

Amazon buys Lovefilm

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by Tom Coyne

US online retail business Amazon has bought out the final shares of Lovefilm, taking over the company. Amazon now owns full rights to the film and game subscription site.

During 2008, Lovefilm bought Amazon’s rental business in UK and German markets and as a result Amazon bought a 42 per cent stake in Lovefilm’s stock, making Amazon the largest share holder.

Amazon has now bought out the final 58 per cent of stock, worth an estimation of £200 million.

Lovefilm was formed in 2004 as a film and games club, sending customers items via a postal service.

The company currently has about 1.6 million members in the UK, Germany, Denmark, Sweden, and Norway.

The company has now started streaming digital movies to PCs and TVs and the buy out allows Lovefilm to further expand it’s on-demand services.

“The deal is a winner for the members who love Lovefilm because of its value, choice, convenience, and innovation in home entertainment” States the chief executive of Lovefilm international, Simon Calver.

“With Amazon’s unequivocal support we can significantly enhance our members experience across Europe.”

Greg Greenley, Amazon’s vice president of European retail also states “ Lovefilm has been innovating on behalf of movie rental customers across Europe for many years and with the advent of the Lovefilm player, they are further delighting customers by streaming digital movies for their immediate enjoyment. We look forward to a productive and innovative future”.

The move is seen as a way to guard against possible expansion of Netflix into the European market.

A giant in the US, Netflix has already mooted plans to expansion outside of North America. By taking over LoveFilm, Amazon appears intent in ensuring it can dig its heels into European markets, and expand them against any direct competition.

Story link: Amazon buys Lovefilm

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