Amazon to Acquire Lovefilm Online Streaming and DVD Rental Service

Amazon has announced that is purchasing the European DVD-by-mail rental and online streaming service Lovefilm for an undisclosed amount. Amazon already had a large stake in the company, but will now become the full owner. Lovefilm's valuation is estimated at over $300 million. The deal still has to be approved by regulators.

"LOVEFiLM has been innovating on behalf of movie rental customers across Europe for many years and with the advent of the LOVEFiLM player, they are further delighting customers by streaming digital movies for their immediate enjoyment," Greg Greeley, Amazon’s Vice President of European Retail, said.

"LOVEFiLM and Amazon have enjoyed a strong working relationship since LOVEFiLM acquired Amazon Europe’s DVD rental business in 2008, and we look forward to a productive and innovative future," he added.

Lovefilm is the European equivalent of Netflix, though it's significantly smaller than its American counterpart. The service, which is available in several European countries, UK, Germany, Sweden, Denmark and Norway, is used by 1.6 million subscribers.

It is the largest player in the European market and has expanded into other areas such as video game rentals and online streaming, but the company has been looking to sell for quite some time now.

Amazon already owned 42 percent of Lovefilm after the later acquired Amazon's online DVD rental business in the UK and Germany. Amazon is now purchasing the remaining stake.

The move is likely a defensive one. Netflix, which is hugely popular in the US and has license agreements with most Hollywood studios and many other content providers, has started expanding and an European launch is likely. It recently opened up its streaming service to Canada, its first and currently only market outside the US.

Amazon has a number of online movie and TV show streaming and purchasing products and may want to solidify its position in Europe ahead of a Netflix launch.

"The deal is a winner for the members who love LOVEFiLM because of its value, choice, convenience and innovation in home entertainment," Simon Calver, CEO of Lovefilm, said. "With Amazon’s unequivocal support we can significantly enhance our members’ experience across Europe."