LoveFilm Beware: Netflix Europe Launch Coming 2012

We spoke recently about consumer preference between Netflix and Hulu Plus, with Netflix coming out on top. The US on demand rental service is now reportedly set for a big expansion which will no doubt be making waves. One of the countries that Netflix will come to is here in the UK, which makes you wonder what impact the move will have on ditto service, LoveFilm?

According to Mashable, Netflix is preparing to venture out of the United States. Firstly to parts of Europe which include the UK and Spain, as well as to Latin America and the Caribbean. The subscription service offers the streaming of the latest movies and TV shows, but recently came under fire after changing the subscription pricing plan. The cost of Netflix before the changes was cited as one of its biggest advantages over rival Hulu.

Netflix split up their streaming services and physical DVD rental into two separate subscriptions, possibly due to the forthcoming expansion. No exact date has been given for the Netflix launch to Europe, but the general thought from everyone seems to be the first or second quarter of 2012. Netflix reportedly held talks last week with European movie distributors, who would supply them with their physical discs.

So exactly what kind of an impact will Netflix have on Amazon owned rival LoveFilm? The on demand service is very similar to Netflix, meaning there will be direct competition between both video streamers. LoveFilm does not have a huge competitor in the UK, like Netflix does with Hulu, meaning they have a very large user base. LoveFilm is available either on the web or through Sony’s PS3, which allows them to conveniently drum up a lot of business because of the large amount of people that own the games console and want to rent from home.

LoveFilm offers both digital and physical films to rent, although they are focusing more on streaming opposed to DVD disc rental via postage. We have seen a decline in Blu-ray and DVD sales, which has seen an increase in digital sales and rental. Netflix are also looking to cut back costs by focusing on digital media as it would save funds on mailers, warehouses, distribution centers and physical disc purchases.

The UK based service is also available around other parts of Europe but there don’t look to be any plans to hit back and launch in the US. It seems likely Netflix will offer subscriptions for low prices at first in an effort to gain a large user base. Once a large number of customers are on board, Netflix could choose to raise prices like the 60% price hike in the US, Tech Radar reports. There is no doubt though that LoveFilm will face some stiff competition from its new American rival, but will the impact be significant?