With so many dealings with each other in the past, it's of little surprise that Amazon has finally decided to buy up UK based movie rental service Lovefilm. The companies have been intertwined ever since Lovefilm acquired Amazon's European DVD rental business in 2008. Part of that agreement gave the global retail giant shares in Lovefilm and with it seats on the company board.
Speaking to Lovefilm CEO Simon Calver and Amazon's vice president of EU retail, Greg Greeley, shortly after the deal was announced, it seems the acquisition agreement has been brewing for a while, and it's not so much fear from competition at its heart as a wide open market on the brink of far bigger possibilities.
“Lovefilm has less than 1 per cent penetration in Germany and only 5 per cent in the UK at the moment", said an enthusiastic Calver clearly buzzing with the news. "So there’s plenty of room for us to grow. We’re really looking to double figures like this in the short term".
With Lovefilm's recent deals to bring digital streamed and on-demand rentals via Samsung TVs and the Sony PlayStation 3, it's pretty clear that the strategy minds have focused on a plan of attack much in the same way as Netflix seems to have in the US. Get on as many devices as possible, something which Greeley confirms.
“We continue to evolve in any way. We’re looking to get onto as many devices as we possibly can and we can now push on harder and faster".
The pair refused to be drawn on exactly which gadgets we'll be seeing Lovefilm on next but it was made very clear that Amazon's experience with the Kindle and in the smartphone app world was going to be key.
“It's such an early stage but right now it’s about sharing expertise", admitted Calver slightly bamboozled from the busy morning's announcement.
"We’ve learnt an awful lot in TV and games consoles and Amazon has learned huge amounts in the digital space as well with mobile devices. The challenge is going to be where to start. There’s no shortage of opportunities for us”.
It's not a far reach to imagine Lovefilm content piped straight to your Android phone, your iPad and even, perhaps, a colour Kindle with the successes both companies have made in the digital world. While the Kindle app and the ebook reading device itself have been incredibly well received, Lovefilm's streaming service was one of the first available from any physical disc rental company.
Greeley was keen to stress to the users that Lovefilm, as they know it, including the name, would stay very much the same, at least in the medium term.
“We don’t see plans to change the name. Lovefilm has a fantastically loyal user base. As for the service, it’s early days, we haven’t locked down anything at the moment but, going forward, we’re really not looking to change much. It’s a hybrid service to get as many hard copy and digital films delivered as possible and that's the aim of the game".
As for the employees of Lovefilm, there was equally calming news.
“Historically, our acquisitions have involved keeping independent teams in place as we have done, for example, with IMDB", reassured the man from Amazon.
"We’re never looking at these moves for ways of reducing costs. So, no, we’ll have the same team in place and we'll be looking to grow. So, in fact, we'll be adding to the staff and not reducing it”.