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Summary:

With Netflix on a roll, its big European rival — Amazon-owned Lovefilm — seems more and more desperate to staunch the flow of subscribers quitting the service and moving elsewhere.

door knocking, used under license courtesy of Shutterstock/Ollyy
photo: Shutterstock/Ollyy

A friend of mine had an encounter that surprised him, and me, the other day: a knock on the door turned out to be a salesman trying to get him to re-sign to Lovefilm, the subscription video service.

Let me say that again: a door-to-door salesman.

I think that’s a first, for me at least. While lots of internet services market heavily — television ads, radio spots, billboards, leaflets and print — I have never come across this sort of feet-on-the-street approach before. Trying to prevent customer churn is one thing, but this just has the ring of desperation about it… and comes as another piece of anecdotal evidence that suggests Lovefilm’s feeling incredible pressure from Netflix.

When Netflix launched in the UK and Ireland a year ago, it was a clear who would be in its sights. Reed Hastings and his team may say they are targeting the bigger pay-TV services, such as Rupert Murdoch’s Sky, but their first hurdle was undoubtedly trying to surpass the Amazon-owned rival.

Lovefilm has been competing where it can, particularly in trying to head Netflix off at the pass by signing exclusive content deals with Universal, Fox, and others. But it’s also trying extremely hard to defend itself by stopping customers from fleeing: when I tried to unsubscribe a while back I realized it was one of those irritating services that forces you to phone up to cancel (a surefire sign that I will never go back).

And you can’t blame them: it would take a brave gambler to bet against the American company right now.

Netflix is storming on almost all fronts, from its acclaimed original programming, to its balance sheet: Wall Street loves it again, as it finally recovers from the farcical series of events it inflicted upon itself in 2011.

And that is having an impact on its rivals.

Former Lovefilm boss Adam Valkin told me last year how the company had feared Netflix since 2004. And though Netflix still has some way to go — it’s still unclear whether Netflix is making inroads against its real targets, the broadcasters, and claims almost dubiously high membership numbers across the British Isles — it definitely has some crucial competitors, at least, running scared.

  1. The bad news is that I have had both LoveFilm AND Netflix door to door sales people knock on my front door (as well as the usual utility, phone, broadband, double glazing etc etc etc).

    So it’s not just LoveFilm getting aggressive or desperate.

    They are all at it.

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  2. Lovefilm may be desperate, but if they’re actually doing anything to strengthen their streaming offering they are being very quiet about it. I had LF for the first part of 2012 after getting a cheap 6-month subscription from Amazon, and the streaming was crap, both in terms of available content and image quality. The by-post service was good, but in 2013 who wants do decide days in advance what they want to watch on TV tonight? I cancelled LF after the 6 months and signed up for Netflix, and whilst I gave up on them too because of the limited content, the actual service was streets ahead – lots of platforms supported, and reasonable quality streams (even if they do rely on the hideousness of Silverlight).

    I stupidly let myself get cornered by one of the door-to-door Lovefilm people in January, and signed up again for the streaming service on a ‘3 months for the price of 1′ deal. I assumed that under pressure from Netflix LF would have got their act together, but not so. HD content is still very limited, and the app for my Samsung Blu-ray player is buggy and can only play some streams in the wrong aspect ratio. There is still no app for playing content on non-Amazon Android devices, which these days is inexcusable.

    Partly the success or failure of these companies is down to how successfully they can negotiate rights with content owners – or provide original content themselves, as Netflix are now attempting – but there really is no excuse for backing up the content they do have with a poor technology offering. If Loveflim spent their TV advertising budget on hiring developers, they might actually stand a chance of being around in a couple of years’ time. As things stand it’s amazing Amazon haven’t already pulled the plug on them.

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  3. The quality of the Netflix apps are head and shoulders better than Lovefilm. I have been a Lovefilm subscriber for over 12 months but after trying Netflix I am making the switch. Our usage of Netflix is much higher than Lovefilm and the availability of excellent HD picture quality and closed captioning (I’m partially deaf) make it a no-brainer to ditch Lovefilm.

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  4. so pierce’s “streets ahead” caught on? that’s saying something for community. available on netflix btw

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  5. Reblogged this on pazikas.com and commented:
    Ive had this myself. A LoveFilm salesman came to the door thing was I hadn’t stopped my subscription which was to the bewilderment of the Salesman.

    I totally agree with the above post as I recently heard that LoveFilm offered a friend 6 months free so they didn’t leave (clearly hopping you forget when the 6 months is up).

    While I have both LoveFilm and Netflix I see myself using LoveFilm less and less on Friday night I was looking for something to watch I perused both services but again found myself on Netflix rather than its competitor.

    With Netflix now having House of Cards and soon Arrested Development I can see this as the beginning of LoveFilm’s decline.

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  6. There is also Sky Now which has access to content before the two can get their mits on it? At least that is their claim.

    I cancelled my subscription back in September as I never got to watching the movies I was being shipped. Cancelling was rather painless. I did it online. I still get gift vouchers to rejoin or to give to friends as gifts.

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  7. Sorry but, hey, how about adding some good old (typical giga om) cred to this post? I miss facts – stats of LF vs Netflix vs Sky etc. Who has the market share, who is eating whose lunch, at what cost…you know, regular, simple, fact-oriented article – rather something driven by a purely anecdotal instance of a salesman knocking on a friend’s door.

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    1. Bobbie Johnson Monday, February 4, 2013

      challenge accepted (at least in part). Please note I said that this was anecdotal, and much of the current data is in articles linked to in the story. In part the problem with reporting the data is that it’s wildly unclear and often a case of apples and oranges. All players have good reason for muddying the waters.

      Netflix suggests it put on 1.8m international users in Q4 2012, but won’t break out territories: 1m subs by the middle of 2012 is the only publicly-accepted figure out there.

      Lovefilm — particularly since the Amazon acquisition — is less keen on sharing numbers too: it’s last major subscriber announcement was a year ago, when it said it’d passed the 2 million subscribers across its five territories. I haven’t seen accurate data since then, though there are suggestions that it’s headed towards 3m: however, that’s not confirmed and there’s still no clear delineation between national markets.

      Sky’s Now TV, a comparable service but one with far more niche approach, added 25,000 users in the last quarter.

      Meanwhile BBC iPlayer, probably Netflix’s biggest UK competitor, says it delivered 2.32bn streams in 2012: http://www.guardian.co.uk/media/2013/jan/24/bbc-iplayer-ipads-mobiles

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  8. You’re joking right? As Oric’s research has pointed out recently, LOVEFiLM has double the choice of Netflix’s movie range. LOVEFiLM is also eating Netflix’s brunch with the growth of their TV seasons – since Xmas they have added 30Rock, Heroes, American Office, Battlestar plus loads of kids content. As for door to door and shopping centre sales activity being a signs of desperation – get real – SKY has been doing this for a decade.

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    1. Bobbie Johnson Monday, February 4, 2013

      I noted in the piece that LoveFilm is doing a lot of very smart content acquisition deals, and the reason is precisely because it’s under so much pressure from Netflix. And it seems they are all (if the comments above are right) adopting very traditional sales strategies for their non-traditional businesses. Why is that? Are they significantly growing the market?

      One thought. Mobile phone companies are notorious for the amount of churn — and yet I’ve never had a door to door salesman from any of them. Any ideas why not?

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  9. I’ve been a fan of Netflix for a long time, in a stock sense I’ve been backing it since $52ish – the simple fact was that even with the continual onslaught from the Street and tech news outlets Reed Hastings kept on coming back standing tall and ensuring that everything will be ok.

    Look at them now, news company keep on mentioned how Company X is going to utilize its billions in the bank to create a Netflix coffin, yet no one has actually come close. For Europe its by far the best thing and there will need to be some serious work from the larger corps to create anything that matches the ease and freedom of Netflix.

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  10. I’ve evaluated both the UK and US Netflix services and (unsurprisingly) the US offering’s still head and shoulders above the UK one. The UK one is ‘spotty’ to put it kindly.

    Lovefilm’s not much different.

    Finding no satisfaction in either, I continue to torrent eps of my favourite shows as they air Stateside; that old adage of convenience and quality rings true once again (surround sound, H.264 720p video, good stuff). I also subscribe to Sky TV here in the UK and series link all my favourite shows as they’re broadcast, so advertisers are still getting relevant revenues.

    I even watch The Daily Show and Colbert Report through an American VPN (because CC UK refuses to syndicate and FX UK – now Fox – dropped Colbert Report years ago, so I also sit through all the US ads. And yes, I have the UK edits of TDS on my Sky box which I go and watch if I can’t be bothered to fire up the VPN. (not quite the same though with some odd edits to cut out US-specific promotalk, and you don’t get the extended web-only interviews… or HD picture).

    I work in the IP and multimedia content industry, so I ‘get’ how the current framework of territories serves the industry. As a consumer though, I find it more frustrating than ever. One foot in both worlds.

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