Home Business NewsBusiness The debate: Will Netflix knock out Lovefilm?

The debate: Will Netflix knock out Lovefilm?

by LLB Editor
10th Jan 12 1:02 pm

As US video streaming giant Netflix stepped foot in the UK Film and TV “boxing ring” yesterday, British competitors Lovefilm and Sky didn’t pull any punches.

The tug-of- war over customers became interesting when amazon-owned DVD and web video service Lovefilm knocked a pound of its £6 basic subscription as a counter move against Netflix’s £5.99 per month offer for unlimited films and TV programmes.

Ted Sarandos, Netflix’s chief content officer shrugged of Lovefilm as no competition and called its UK rival “too complicated”.

“We only offer one package and one price point. Lovefilm offers too many options. We are very comfortable going after the same audience and product because we are specialists in what we do. No-one ever failed for being specialised,” he told the Daily Telegraph.

Simon Calver, chief executive of Lovefilm, however, made no scathing digs. “We offer customers an unparallelled range of titles, including exclusively available blockbusters.

“Our two million members can look forward to us adding even more world class content, in a variety of formats, to be delivered across an ever expanding range of digital platforms.”

Not too far behind, Sky Movies, a service that has about five million customers, appeared nonchalant about reports that Netflix might throttle its business.

In a statement, Ian Lewis, the director of Sky Movies said, “There is room for other services but millions of customers turn to Sky Movies because they know they will see the biggest and best movies first.”

While the digital doyens lock horns to claim the number one spot in the UK, experts in the industry point out that “content is king”. Deciding who’s going to be UK’s ultimate supremo in the video-on-demand arena will not be an easy one.


Richard Alvin, founder of a private equity company and group Managing Director of Capital Business Media:

“Netflix have missed the boat with first impressions in the UK”

“The Netflix’s service boasts to be offering customers unlimited access on demand to “tens of thousands” of Hollywood films and television shows for £5.99 a month.

“In media interviews, and it was hard to miss chief executive Reed Hastings as he was on most channels, saying that his service was betting on a breadth of locally produced content including full seasons of UK favourites such as Top Gear, The Only Way is Essex, The Inbetweeners and Torchwood.

“Lovefilm, which is now owned by Amazon claims to have two million subscribers, a milestone which they quite handily reached today, offers film rentals by download and post plus their own streaming-only package, Lovefilm Instant.

“Hastings, was unruffled by talk of Lovefilm when he spoke to the media saying “I don’t think of Lovefilm as a threat at all,” he said. “The main rival is BSkyB, with Sky Movies and Sky Atlantic – they’re the ones with big content. Lovefilm has some strengths but we’ve got some strengths including that we’re on all platforms. We are both competing against each other, against BSkyB,” he said.

“I, like many joined NetFlix today as part of their free month’s trial (remember to cancel, if you don’t want to carry on), so was I greeted with a plethora of the films and programmes that I just must see? Err, well, no.

“Content is king, you join LoveFilm or NetFlix to watch back episodes of classic TV programmes or films that weren’t quite worthy of an investment in popcorn.

“So NetFlix is available on more platforms than LoveFilm – although I am not sure I understand this argument – however what are you actually going to watch?

“I spent 10 minutes going through the NetFlix library and I found nothing, I flipped over to LoveFilm and within two minutes I had a list of six programmes, I was in virtual box set heaven, and three films.

“Are NetFlix, this US based giant still loading their system? You only get one chance to make a first impression and for me I think they have missed the boat in the UK.

“LoveFilm has first mover advantage and NetFlix needed to launch against them with a torpedo loaded with the very best content, and choice of content, they failed to do that today.

“LoveFilm’s position in the UK is secure as NetFlix might have ten times as many subscribers than LoveFilm, but the UK firm has ten times the content and people join up to and stay with a content streaming company for, wait for it, the content!”

hugh chappell

Hugh Chappell, non-executive director of Markco Media:

“Success in the US does not guarantee success in the UK however 20 million customers is impressive.” 

“DVD is a declining market so on one hand it is a smart decision by Netflix to concentrate on streaming only due to this fact and lower costs of entry as a result. 

“While in decline, DVD is still a huge market so Lovefilm is in a position to migrate existing customers to streaming. The competitive landscape however is not just Lovefilm and Netflix. Sky and others must be considered.  Ultimately it will be content, technology, market awareness, price and customer service which will determine the winners,” he added.


Paul Sawers, UK & Media Editor at The Next Web:

“It’s too early to call a winner”

“Lovefilm or Netflix – which one will dominate the UK market? It’s a tough call, but ultimately I don’t think either will ‘dominate’ per se. Given that Lovefilm already has significant traction in the UK, with 2 million members, it would be too easy to say that it will ultimately prevail.

“Netflix already has over 20 million members across 45 countries, and it knows how to launch in new markets, so this isn’t uncharted territory for it. And if you look at LoveFilm’s actual numbers, you’ll see that the vast majority of them are actually on DVD-dispatch packages, whereas Netflix is entering the UK as a streaming service provider only.

“So although LoveFilm does have a bit of a headstart over NetFlix in terms of members on a streaming service, it’s far from insurmountable and isn’t nearly as impressive as the figures first suggest.

“DVDs aren’t dead yet, but they’re dying. The UK may be a little tardy making superfast broadband available to all, but it will get there soon and when that happens, it will all be about streaming, whether that’s through computers, tablets or Web-enabled TVs.

“With that in mind, I’m tempted to say both companies will be working from roughly an even keel before too long in terms of members, Netflix just has to market itself in the right way to get into the public’s consciousness.

“Also, both Netflix and LoveFilm have been following very similar trajectories in recent times, signing up rights deals with major film studios and independent distributors, and both actually signed up the BBC recently.

“It will essentially come down to who offers the best streaming experience, and as it stands there’s nothing to suggest there can’t be room for both to flourish in the UK movies-on-demand space.

“If push came to shove, I’d say Netflix’s early attention to streaming could see it have the slight edge over LoveFilm which has only fairly recently been giving the necessary attention streamin
g deserves. But…LoveFilm has the backing of the mighty Amazon, and LoveFilm knows the UK market better than Netflix does.

“But all this overlooks one glaring point. There are other incumbents to deal with in the UK – Sky Movies and Sky Atlantic are the obvious ones. I think both Netflix and LoveFilm will be looking to keep pace with Sky from a movies perspective. And the really rather excellent BBC iPlayer is a very tough nut to crack, offering excellent content and a great viewing experience.

“Netflix offers a better range of devices for streaming its video, and it is integrated with Facebook. But I can’t help but feel that other European countries would’ve been a better first entry to market, because the competition is already there in the UK. Netflix will find it hard competing with three large, established companies, whilst the rest of Europe is ripe for launch.

“There are too many ifs and buts to call a winner at such an early stage, all I’d really like to say is it will be very interesting to watch over the next year or so. There will likely be a lot of ups and downs for both companies as the battle heats up.”

  • Who would bag the top spot according to you? Leave your comments below and join the debate.

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