Amazon has announced that it will be shutting down Lovefilm, a DVD rental service that has been running since 2011. The service, which runs in Germany and UK allows users to rent their favorite movies via mail, and return them the same way, once they were done watching. Lovefilm was a monthly subscription service similar to Netflix's DVD plan; which was their core business before venturing into the streaming service.
The decrease in demand for the service was cited as the reason for the closure by Amazon. In a statement, they said that the demand for DVD and Blu-ray rental had dropped significantly, with people opting for streaming services.
The announcement was posted on Amazon's website.
Winding up
Lovefilm by post will be shut down by October 31, 2017, and customers will not be billed for the last month. The giant company offered its subscribers an alternative in the form of Amazon Prime Video, on a new Firestick at a discounted price.
Lovefilm staff, numbering around 50, will be reassigned to other posts and will not be let go according to the statement. The Lovefilm collection on the other hand which numbers around 80,000 titles will be donated to charity. Lovefilm was bought by Amazon in 2011 for $312 million.
No surprise
The announcement came as no surprise to industry players since streaming services have seen the interest and demand on DVD rentals dwindle steadily over the years.
Netflix still has an active Dvd Rental service, for now, and even released a standalone app in the US, called Netflix DVD early this year. The app was to enable subscribers to organize their rentals. Currently, Netflix has 4 million subscribers on the service which is a small number, compared to 94 million streaming users. The company has also experienced rental drops since streaming dominated the market.
By the end of the current quarter in September, Netflix expects to have almost 110 streaming subscribers.
Lovefilm
Although Lovefilm can not compare to Netflix's numbers, at its peak, it had over 3 million subscribers across both DVD rental and their streaming services. A few years ago, Lovefilm instant was integrated into Amazon Prime Video.
As expected, the announcement did not go down well with some subscribers. One claimed that DVD rentals had a wider selection of films in the catalog compared to the streaming service. While another customer claimed that he lived in a small town with no rental stores around.
