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The UK PPV movie JV owned by Sony (NYSE: SNE) and Disney (NYSE: DIS) is on an aggressive expansion that will see it unleash up to 10 white label online movie services to compete with Netflix (NSDQ: NFLX), Lovefilm and Blinkbox.
Having recently added Channel 4’s Film4oD to its long-time sole customer Virgin Media, FilmFlex on Thursday launched HMV’s new HMV On-Demand store, as the entertainment retailer tries augmenting physical sales with digital revenue streams.
“This was essentially a one-contract company with Virgin,” FilmFlex CEO Jeff Henry tells paidContent. “With my arrival, we’re going absolutely headstrong in to a strategy of being the white label partner of choice.
“We’ve identified that there is a place for a company like ourselves who does not wish to be a consumer brand. You’re going to see a number of deals coming through in which we use our rights expertise and relationships to offer other companies who have a legitimate role within this space. We’ll target six or seven new companies within a year.”
Though Lovefilm and Netflix boast strong DVD brands, their core subscription model limits their online repertoire because heavyweights like Sky Movies own exclusive rights to the subscription window (a fact that has been provisionally ruled anti-competitive).
But FilmFlex, like Blinkbox, plays plays primarily in the transactional-VOD space. “As movies finish their theatrical window, they come straight to us,” Henry, who took over at FilmFlex this summer, says. “Netflix, Lovefilm and Sky get them after our window. We see the whole download-to-own space as having huge potential.”
So, although Netflix, for its international expansion, can draw on a $400 million warchest and can afford to go loss-making, and although Amazon (NSDQ: AMZN) is poised to make a splash with Lovefilm, Henry is bullish.
“Bring it on!,” he says. “We’re delighted.
“This is a very interesting space. There are going to be brand wars. The starting pistol has already fired on that, with Lovefilm buying up Netflix’s search terms.”
Still, FilmFlex will allow clients to operate subscription and other pricing after a recent partnership with the PayWizard facilitator.
FilmFlex powers Virgin Media’s movie VOD on Virgin’s TV set top boxes and website. Though Film4oD and HMV (LSE: HMV) On Demand are currently available only on web, FilmFlex is currently developing capabilities to take its clients’ services on to connected TVs and other devices – where the larger opportunity really lays.
“HMV are not the only company who believes they have a legitimate ability to monetise content.
“I’ve tried to monetise free content with ITV (LSE: ITV) and know how hard that is to do. But movies are absolutely monetisable. We will be embarking on limited overseas opportunities, too.”
As chief of ITV Consumer, Henry once planned to triple the broadcaster’s online revenue to £150 million – a target that, through the advertising downturn, it was unable to meet.
FilmFlex takes movies from 30 suppliers and, despite its JV holders, Henry says does not enjoy favours from Sony or Disney. “Categorically not,” he insists. “If we were in any way biased, I wouldn’t be able to effectively negotiate with all the other studios.”