Online movie streaming and at home DVD distributing company Netflix has announced that they have amassed over 20 million subscribers. They had projected to add 3.6 million subscribers in 2010, but ended up doubling that figure due to the astonishing growth in popularity of their instant streaming feature. With all of these new paying customers profits are through the roof, rights to more content is being gobbled up, and brick and mortar video rental stores are nearly a kitschy memory.
Add to this estimations that their expansion into Canada will become profitable within the next year and the media distribution company finds themselves in a pretty powerful position. It comes as no surprise then that their next move is to expand into even more countries. The company believes that they can make new international markets profitable within two years, and with all of the cash from their North American operations that they are sitting on, I imagine that is a pretty safe gamble to take.
But all of these machinations and schemes come barely a week after it was announced that Amazon, who has recently launched a Video on Demand service to rival Netflix here in the US, had acquired Lovefilm, a Netflix-esque company that streams films and ships DVDs to 1.6 million subscribers in Britain, Germany, Sweden, Denmark, and Norway. It looks like there is a serious smackdown on the way to decide who is going to be the one sending us movies. To the winner will go both the profits, and the leverage to sign better deals with content rights holders. Netflix has the foothold here in North America, but Amazon has gotten a jump on them in Europe. Who will reign triumphant? If a childhood spent playing Risk has taught me anything, it will probably be a third company who spends the next few years camping out in and fortifying Australia so that they can swoop in and take the game after Netflix and Amazon have decimated each other’s forces. I would be keeping a close eye on Rupert Murdoch if I were them.