LoveFilm

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LOVEFiLM International Ltd.

Type	Limited
Founded	2003
Headquarters	Portal Way, London United Kingdom
Key people	Simon Calver,CEO; William Reeve, Founder & COO; Jim Buckle, CFO
Industry	Home Entertainment
Products	Retailing-DVD/
Revenue	c.US$100 million (2007)
Employees	250-499
Website	www.Lovefilm.com

Front of a LOVEFiLM envelope

Back of a LOVEFiLM envelope

LoveFilm (official typeset LOVEFiLM) is a British DVD rental company which provides online DVD rentals, console game rental and film downloads in the UK, Germany and Scandinavia. It operates the LOVEFiLM.com and BRAFILM.no (in Norway) websites, as well as providing the actual website and delivery infrastructure for an array of branded services in partnership with other British companies.

1 History
2 Pricing plans and associated rental services
- 2.1 LOVEFiLM-associated rental companies
- 2.2 Former LOVEFiLM/Video Island-associated rental companies
3 Advertising
4 "Throttling" and dispute of fair usage policy
5 References
6 External links

[edit] History

LOVEFiLM has grown through ten mergers and acquisitions of other online DVD rental companies - the three main ones being Online Rentals (the original company), ScreenSelect and Video Island.

In May 2002, Paul Gardner & Graham Bosher launched Online Rentals Limited t/a DVDSONTAP.COM operating out of Harlow, Essex. In September 2003, ScreenSelect.co.uk was launched by Alex Chesterman and William Reeve, operating out of Acton, W London. And in the same month Saul Klein launched Video Island, operating out of Kings Cross in central London.

In August 2003, Online Rentals Ltd was approached by Arts Alliance Media, a family-owned private equity firm who wished to buy the business, and sold a controlling stake in October 2003. In February 2004, Online Rentals Ltd changed its brand to LOVEFiLM.com and relocated to much larger premises in the Spire Green Business Park in Harlow, Essex.

In September 2004, ScreenSelect merged with Video Island and adopted the former's brand name with the latter being the holding company name. Saul Klein left the business soon afterwards. The year 2005 saw both LOVEFILM.com and ScreenSelect grow rapidly as fierce rivals. LOVEFILM.com claimed to reach 50,000 subscribers in December 2004, and 100,000 in March 2005, a month in which it shipped almost 700,000 rentals. Over this period ScreenSelect reached over 200,000 customers. In June 2005, ScreenSelect acquired DVDs365 (owner of Mailbox Movies, MovieTrak and Qflicks ^[1]) and a few months later LOVEFILM.com acquired Webflix ^[2].

The step-change for the industry was the eventual merger between LOVEFILM.com and the larger ScreenSelect in April 2006. The resultant company, operating on the Acton-based ScreenSelect platform, then adopted the LOVEFiLM.com name in all its key markets in October 2006.

The latest claims are over 600,000 members, over 65,000 titles, and over 2 million rentals per month. LOVEFiLM.com faces competition in the UK from traditional high street rental, the online operations of Blockbuster and many smaller operators such as MyMovieStream and Cinema Paradiso, as well as from the broader home entertainment and movie market, including DVD retailers, and the likes of Sky Movies and the emerging BT Vision.

The company has been a pioneer in the area of legal movie download services, offering feature films, shorts and TV series in a range of legal download formats. It was the first company worldwide to offer a major blockbuster film for legal download to own when it released King Kong for download on the day of DVD release in April 2006. The company claims its UK service offers more downloadable films than any of its competitors including BT Vision, Sky Movies, and Apple Inc..

On February 4, 2008, LOVEFiLM announced that it plans to acquire Amazon's DVD rental business in the UK and German markets^[3]. Now finalized, Amazon has become the largest shareholder of LOVEFiLM.

LOVEFiLM is backed by Arts Alliance Media, Balderton Capital, DFJ Esprit and Index Ventures.

[edit] Pricing plans and associated rental services

LOVEFiLM's own service provides "Unlimited" (£9.95-£15.99) pricing plans^[4], ranging from 1-3 DVDs out at a time (a 4-disc plan at £19.95 has been offered in the past). There are also "Combination" plans which allow the rental of both DVDs and video game discs at higher prices. In 2007, LOVEFiLM has launched lower priced capped packages for 2 or 4 discs a month from £3.99 as well as Pay as you go options.

Each of the "powered by" services will typically have plans similar to LOVEFiLM's (although some may only have a subset), and may have varying prices, different length free trials, etc. It is not known whether customers of the various companies are treated differently when it comes to choosing titles to be sent. Customers are limited to a single free trial among the array of related LOVEFiLM-powered companies.

[edit] LOVEFiLM-associated rental companies

The following is a list of current white label services operated by LOVEFiLM in the UK/Scandinavia ^[5].

CD-WOW![1] - an online retailer. Offers Unlimited-3
Sofa Cinema[2] - the Guardian newspaper sponsors this one, offering Unlimited-3 and Light-2.
WHSmith Movies Direct[3] - from the WH Smith bookstore chain. Offers Unlimited-3 (£13.99) and Limited-1.
Tesco DVD Rental[4] - Service for the Tesco supermarket chain website, offering 1-3 unlimited DVD rental plans.
EasyCinema.com[5] - Service in conjunction with the Easy Group.
Odeon Direct[6] - Service in conjunction with the Odeon cinema chain.

These are in addition to current and previous partnerships with the Evening Standard, Dixons, Virgin and Woolworths in the UK, TV4, Coop, Telia and Astoria in the Nordics and an exclusive partnership with Deutsche Post in Germany [7].

[edit] Former LOVEFiLM/Video Island-associated rental companies

Sainsbury's DVD Rental - The Sainsbury's supermarket chain. Offered Unlimited 1-4 plans at lower prices than the regular LOVEFiLM levels. This was closed by Sainsbury's following a 'strategic review'.
MSN DVD Rental - Service operated through Microsoft's MSN channel.
ITV Movie Club - Service operated through the ITV website.
mymovies - in association with the mymovies.net portal site.
FilmFour DVD[8] - Film Four is a free-to-view movie channel which is available on Digital TV. Offered Unlimited-2.
Five Movie Club - Britain's Five channel. Offered Unlimited-1,2,3. Discontinued early 2007.
lastminute.com - offers Unlimited 1,3,4 and Lite 1,2,3.
BraFilm - Service for Sweden, acquired by Video Island and now rebranded as LOVEFiLM.
digitarian.dk - Pioneering Danish DVD by mail, acquired by LOVEFiLM and rebranded.

[edit] Advertising

LOVEFiLM originally used partners to advertise its services but started to run TV adverts from 2006. Since then, the amount of white label services and partners has decreased, possibly due to increased brand awareness of the LOVEFiLM name. Since advertising on a regular basis on TV the company has used British male actors for voice overs - Ewan McGregor, Bill Nighy and Ray Winstone^{[citation needed]}. LOVEFiLM advertise in multiple media - online, press, TV, train posters, door drops, promotions and even bathroom posters in clubs, pubs and service stations.

It uses a lot of affiliate marketing to advertise its products

[edit] "Throttling" and dispute of fair usage policy

Prior to the merger with Video Island, LOVEFILM came in for criticism from users over its claim to offer "unlimited" DVD rentals. Some users reportedly found the company used long delays at the shipping stage to reduce the number of films a month a customer can rent. The company was subject to a dispute by the Advertising Standards Authority over the use of the word "unlimited" in their advertising. It was revealed that they practiced throttling. This is where high-volume customers may experience a greater likelihood of (slower) shipments from alternate warehouses, and selections from lower in their rental list. They are also less likely to receive replacement shipments on the same day a disc is received.^[6] The company itself claimed that this "fair usage" policy means all customers get a similar service.

The merger with Video Island was completed in October 2006, at which point LOVEFiLM's original technology platform was replaced with ScreenSelect's, and ScreenSelect's brand was replaced by LOVEFiLM. Policies, prices, packaging and processes were harmonised between ScreenSelect and LOVEFiLM.