Lovefilm and Blinkbox are putting on their best game faces as well-resourced Netflix (NSDQ: NFLX) prepares to assault their native UK in the new year.
“I wouldn’t have picked the UK to enter if I were Netflix,” CEO Michael Comish of Blinkbox, the online movie service that this year got snapped up by supermarket giant Tesco, said at C21’s FutureMedia conference.
“I would not want to be sandwiched between Amazon (NSDQ: AMZN) and Sky, which is where they’ve positioned themselves. I’m not sure how they will define failure – but it will be a long time before they get a return on investment – if they do.”
Comish’s pessismism about his home market reinforces Netflix’s own belief that its international expansion will be hugely loss-making for some time and will push the entire company in to a group-wide loss for 2012.
That said, Comish said he sold Blinkbox to Tesco this year precisely to front up to bigger competitors like Netflix.
Lovefilm, too, is putting on its best defence. “It’s nice to be thought of as the ones that should be scared – we’re not,” its chief marketer Simon Morris told C21’s FutureMedia.
“It’s like jostling in a queue. we’re in the right queue. I could do without new competitors, of course we could, But it’s a fact of life, you have to deal with it. I think of the Stones versus The Beatles, Oasis versus Blur – whenever you have a race for number one going on, everybody wins. In an incoming tide, all boats rise together; it’s good for business.”
In the subscription pay-TV window that both Lovefilm and Netflix operate in, their respective catalogue options are limited because Sky Movies enjoys exclusive Hollywood rights.
“If you want to get Harry Potter tomorrow, it’s not on Lovefilm, it won’t be on Netflix, but it is on Blinkbox,” said Comish, whose site mostly enjoys earlier, better movie access than either by vying for PPV, not subscription, rights. “We get our content before Sky does.”
Against the Netflix threat, which has recently seen it land three big movie deals onUK turf, Lovefilm may find itself needing further integration with its hefty owner Amazon, which does not yet offer movie or TV content in Europe but which coud start to buy rights if it made a concerted effort.
“We are in control of the business. They haven’t storm-trooped in and turned us in to retailers,” Lovefilm’s Morris told C21’s FutureMedia.
“We’re looking at different forms of (the name). Lovefilm means more in certain countries than it does in others. But, as a general rule, think of it as a wise old uncle and an enthusiastic young nephew. We are doing the passion for the business. Passion is attractive to consumers. Some combination of local passion and global resource is where we’ll end up.”