New Competitor for Streaming Movies

By Lucy Mitchell
Jan 20 2011

Amazon announced today that they have purchased LoveFilm, a UK-based company that works on the same premise as NetFlix. The world’s largest online retailer plans to offer the service in the US as a competitor for NetFlix.

The one fly in the ointment is the fact that LoveFilm is currently not setup to deliver the films online or streaming through the television as NetFlix is. This is one step that experts in the field have said needs to happen if the company is to survive in the market.

NetFlix announced streaming service two months ago. Customers with certain devices, such as the Nintendo Wii or the Playstation 3, can sign up for the service and stream movies directly to their televisions rather than waiting for the DVD to arrive by mail. This has become a highly popular service with the consumers in the US.

LoveFilm is essentially the same company. They offer DVDs by mail and allow the customer to keep the title for as long as they want. When they send it back the next one is sent out.

With the backing of Amazon it is likely that LoveFilm will be able to make the transition to streaming without a problem. Amazon said in their statement that they have big plans for LoveFilm in the US market.

At this time there is little in the way of competition for NetFlix and the addition of a new company may tip the scales and create far more demand.