Amazon.com Inc’s. (AMZN - Analyst Report) LOVEFiLM announced a new streaming deal with NBCUniversal International TV Distribution to extend the archive of films.
Lovefilm is Amazon’s European DVD and streaming movie service, which has almost 2 million subscribers. The service allows users to rent, buy or subscribe to thousands of movies and TV episodes via LOVEFiLM Instant.
The new series includes comedies like the U.S. version of The Office starring Steve Carrell and the multiple award-winning show 30 Rock starring Tina Fey and Alec Baldwin. In addition to David Hasselhoff's ultimate '80s cult TV classic Knight Rider, LOVEFiLM will also add popular NBCU science fiction dramas like the smash hit Heroes to its titles.
LOVEFiLM has already signed a number of TV deals with ABC, BBC and ITV, consistently adding movies and television shows to its streaming video service. The latest deal with NBCUniversal will expand LOVEFiLM’s already-large selection of movies and TV episodes available to customers as part of their membership.
According to TechNavio's analyst forecasts, the Global Video on Demand market is expected to grow at a compound annual growth rate (CAGR) of 16.8% over the period 2011-2015. Amazon’s LOVEFiLM is well poised to capitalize on this million dollar opportunity by expanding its collection of top TV and movie content via LOVEFiLM Instant.
Last week, Netflix Inc. (NFLX - Analyst Report) launched its unlimited online streaming services in the U.K. at a monthly subscription rate of £5.99, something rivals Amazon’s Lovefilm and other online players such as Channel 4, the BBC, British Sky Broadcasting Group plc and ITV plc will find hard to match. However, Amazon’s Lovefilm has an introductory subscription price of only £4.99 per month, which is an advantage.
Amazon is one of the leading players in an extremely fast-growing market. We think Amazon’s Lovefilm will probably see sales increasing, as subscribers take note of its improving portfolio. In the last reported quarter, its International segment revenue grew 7.5% sequentially and 19.8% year over year. We believe such deals will strengthen Amazon’s presence in important markets all over the world.