Netflix cues up UK launch to rival LoveFilm

 

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The Independent Online

Netflix, the US movie rental sensation, is to launch in the UK, seven years after an initial attempt failed.

The surprise announcement yesterday revealed that Netflix plans to expand its online movie streaming service to the UK and Ireland next year, putting it head-to-head with LoveFilm, YouTube and a host of other players.

The company has not yet released details of pricing or the catalogue it plans to offer, or even why it is returning to a market that proved too tricky to crack the first time around.

Netflix was founded in 1997, shaking up the video rental market as it persuaded customers to pay a monthly fee in return for mailing them DVDs with no late fees. It began streaming films over the internet in 2007 and as it expanded to new markets the number of customers has risen to 25 million.

The Nasdaq-listed shares peaked during the summer, but the company has suffered since. In July it raised its prices by 60 per cent, which prompted some customers to head for the exits. Dan Cryan, a senior analyst at IHS Screen Digest, said Britain was a "potentially interesting market" for new streaming services. "This is a ballsy move by Netflix," he said. "It could be really good for UK consumers."

The company is understood to be aggressively negotiating for rights, and certainly has the financial firepower and expertise to make an impact on the market. Implementing a streaming service would also be easier than a DVD mailing service, Mr Cryan said.

For those who are willing to pay, there is already LoveFilm, which was bought by Amazon for about $200m (£125m) in January. Google announced a movie rental service for Android customers last week, shortly after setting up on YouTube. Apple offers rentals via iTunes and earlier this year Tesco bought 80 per cent of Blinkbox, which offers streaming.

UK internet users spend 240 million hours a month watching online video. In September, there were 785 million visits to online video sites.

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