Netflix vs. LoveFilm: The war of the video streaming services

With platforms such as BBC iPlayer and 4OD becoming increasingly popular, and illegal film streaming a major issue, 2012 looks set to be the year when the U.K. market for video-on-demand subscription services explodes. The successful U.S. site Netflix launched in the U.K. this week, on the very same day that U.K. site Lovefilm, originally known for popularising online DVD rental, announced a new streaming-only package.

Kelly Brook

Thanks to video upload services such as YouTube and Megavideo, most popular films and TV series are available to watch online because of fans who illegally upload them. The popularity of such sites has shown there is a huge and fast-growing market for streaming and downloading films online. Several established companies are attempting to cater for this audience, including online DVD rental giant, Lovefilm. Films and TV series are also available to download from iTunes. The U.K. online TV and film market is predicted to be worth £379 million by next year!

This week the race to be the U.K.’s favourite video-on-demand service got competitive. Netflix, which has been a huge success in the United States, launched in the U.K. with a major publicity push. They even held a star-studded launch party which was attended by Kelly Brook (pictured right at the party) and The Only Way Is Essex‘s Sam Faiers and James Argent. The Only Way Is Essex is one of the shows which Netflix subscribers will be able to watch if they sign up to the site’s £5.99 per month subscription service, which gives users unlimited access to a huge selection of video content, including the latest releases and old classics.

Clearly concerned that their American rival would win over their potential customers, Lovefilm announced a new package on the same day, which gives users access to all their video content for £4.99, undercutting Netflix by £1. Lovefilm has a lot to lose if Netflix is a success in the U.K., but winning over U.K. film and TV fans is just as important to Netflix. As the American company lost 800,000 subscribers in the last three months in the U.S. due to price increases which annoyed customers, they’ll be depending on U.K. success to get their business, and reputation, back on track.

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