It’s been a story as chequered as any in the TV and movie library that it carried. Lovefilm, the little British upstart that pioneered DVD rentals, finally shuts down after many consumers made the move to streaming services.
As the ending credits roll after 15 years, it is worth remembering that the Lovefilm story was one of constant agile adaptation to the prevailing media economy – and its legacy lives on inside the new-look video landscape.
An acquisitional history
For one, Lovefilm was the product of the roll-up of several early rivals. The original, DVDsOnTop, launched in 2002, but rebranded as Lovefilm a year later after its acquisition by Arts Alliance Ventures. In 2004, rival ScreenSelect accelerated the consolidation of the emerging sector, acquiring In-Movies, Video Island and DVDs365, while Lovefilm snapped up Webflix and the online business of retailer Choices. By 2006, ScreenSelect and Lovefilm themselves merged.
This was a wave of pioneers. Where, now, Lovefilm has given way to streaming operators like Netflix, at the time, it was disrupting established leaders like Blockbuster, the main source of DVD rentals, with a home delivery service – Royal Mail delivering movies before broadband had gone mass-market.
It’s not that Lovefilm didn’t transition to digital early. By the end of 2008/09, online was its primary business. But its own acquisition of Amazon’s nascent DVD rental business in 2008 solidified the trajectory that was emerging. Whilst, to many observers, it looked like a reverse takeover, Amazon became Lovefilm’s largest shareholder.
The digital transformation
That ownership gave both sides the focus and power needed to reboot DVD rental as video subscription. It is easy to forget it now but, at the time, Lovefilm’s online repertoire was disappointingly small; studios were reluctant to license their movies to digital players. But Amazon’s heft gave Lovefilm wings. When Amazon fully acquired Lovefilm in 2011, it soared in digital. Amazon had always intended to use Lovefilm as its vehicle into video-on-demand and, three years later, folded Lovefilm’s digital offering into its new Amazon Instant Video, retaining the name Lovefilm By Post for DVDs. It is that branch that is now ceasing activity.
Living to stream another day
Lovefilm’s demise is not a negative outcome that stems from being left behind – rather, it is a victory for the many entrepreneurs and investors who contributed to building the future of media delivery, and who carefully and deliberately made a migration that took years. It is the next logical step in the evolution of video content within our digital lives.
I suggest the next wave of media transformation comes not in the delivery, but in the package, which is currently being tested. We are now close to having as much instant access to and delivery of video as we could ever hope for – more, in fact, than there is time for. Three hundred videos are uploaded to YouTube every minute.
The growth in content choices and the trend towards consumption are forcing the containers of content to change.
Overall daily time spent watching UK TV on traditional platforms has been declining since 2011. Even the once-dependable TV fare of live sports is waning, with 2016/17 English Premier League audiences down 22% from the 2010/11 season.
But consumption via mobile is booming. Since mobile consumption tends to occur in the fleeting moments in transit from one activity to another – on the train platform, waiting in the queue – it compels content to be shorter, snappier and more compelling.
Taking a bite out of content
We have heard about “snackable” content strategies for years. The Lovefilms of the future should now be investing in reinventing content in a shorter, more attention-grabbing format.
A recent study of ours recently found that shorter videos gained more views and with only 1% of all social video content actually going viral, many companies are already trying their hand at becoming part of the one percenters. The bigger players are waking up to this trend as NBCUniversal and Snap, owner of the Snapchat app, which is famed for hosting videos of just 10 seconds long, just formed a studio together, dedicated to producing short-form comedies and drama for mobile screens.
Undeniably, in tandem with the explosion in video content consumption online, attention spans have dwindled significantly in response. If we fast forward to a decade from now, this is likely to be even more pronounced than now. By 2027, we’re likely to see all long form content adapted significantly towards creating additional shorter, digestible content for consumers.
As evidenced by the closure of Lovefilm, consumption trends can change as quickly as they came along, getting ahead of the curve is critical to survive.