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 Posted: Tue Oct 04, 2005 7:53 am Post subject: Videoisland buy overseas dvd rental firm |
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Now videoisland is buying another company but this time in overseas.
| Quote: | Online DVD firm strikes out overseas
Matthew Goodman
VIDEO ISLAND, the online DVD rental firm, has made its first overseas acquisition, snapping up a Scandinavian rival, Brafilm.
The deal sees the group become the largest player in Sweden and Norway. It already claims to be market leader in the UK although this is disputed by close rival Lovefilm.
Financial terms of the Brafilm acquisition, which will be announced today, are not being disclosed although the deal will be funded in cash and shares. The business is about a fifth of the size of Video Island with about 25,000 subscribers, and takes the UK group to 150,000 members.
The company believes Scandinavia is an attractive area to expand into because it is one of the biggest rental markets in the world. It also has high levels of broadband and DVD penetration.
Video Island is not alone in having expanded into the Nordic region. Arts Alliance Media, the majority shareholder in Lovefilm, bought a controlling stake in Brafilm’s rival Boxman, Sweden’s No 2 player, in July.
As well as renting DVDs direct to consumers, Video Island also produces white label sites, running online rental operations for the likes of Tesco and ITV. It plans further deals on the continent. It is particularly interested in Germany and France.
The company has been on something of an acquisition spree over the past year or so. In June, it bought DVDs 365, together with that firm’s sister brands Mailbox Movies, QFlicks and Movietrak. That followed a deal the previous August when it bought Screenselect.
Online DVD rental firms are a growing phenomenon and represent a very real threat to traditional high-street video stores.
Subscribers pay a monthly fee, usually around £10 or £15. The chosen DVD is sent out to subscribers by post. When finished, the disc is returned. There are no late fees. Most services allow unlimited rentals but you must return the discs before receiving your next selection, from a list registered at the rental firm’s web site.
Video Island was one of the first players into the UK. It has a number of blue-chip backers including Cazenove and the venture-capital firms Benchmark and Index Ventures. The business’s founder Saul Klein was recently replaced as chief executive by former Pepsi executive Simon Calver. |
timesonline.co.uk/article/0,,2095-1774158,00.html |
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