Amazon.com has agreed to sell its European DVD rental business in the UK and Germany to LoveFilm International, a London-based online DVD rental services. LoveFilm has raised VC funding from Arts Alliance Media, Balderton Capital, Esprit Capital Partners and Index Ventures.
Amazon.com (NASDAQ: AMZN) and LOVEFiLM International (www.lovefilm.com), today announced that LOVEFiLM will acquire Amazon Europe's DVD rental business in the United Kingdom and Germany. As part of this transaction, Amazon Europe will also make a cash investment and become the largest shareholder in LOVEFiLM International Ltd., and finally, the two companies will enter into a multi-year marketing agreement in which Amazon Europe will promote LOVEFiLM's services on its sites for UK and German customers.
Completion of the deal is subject to regulatory approval in the UK and Germany. Following completion of this deal, the new LOVEFiLM subscriber base will total over 900,000 customers predominantly in the UK and Germany, but also in the Nordics (Sweden, Norway, and Denmark).
“As one of Europe's largest online DVD rental businesses, LOVEFiLM is well established to serve customers' increasing demand for entertainment,” said Greg Greeley, Amazon's vice president of European retail. “Our investment will enable LOVEFiLM to grow the business further and we are excited to be part of their future.”
Simon Calver, CEO of LOVEFiLM International said, “Customers are faced with an astonishing array of choices in the entertainment world these days. LOVEFiLM International will ensure that Amazon Europe's customers get the best possible DVD rental service. We will be delighted to welcome all Amazon Europe customers to the LOVEFiLM service. This new, bigger customer base will give us an even better position from which to build LOVEFiLM as the best place for customers to find film.”
Amazon Europe will continue to operate the DVD rental business on behalf of LOVEFiLM for a period of time following the close of the transaction to ensure an efficient transition and smooth customer experience. No staff reductions are planned at Amazon's German or UK operations as a result of the business transfer.