Netflix set to Rival Lovefilm with new Streaming Service

NETFLIX has announced plans to return to the European movie rental market with a streaming-only service at some point during the second half of this year.

Netflix have made no clear statement regarding which country will get the service but Chief Executive Reed Hastings dropped a big UK-shaped clue.

Describing the plans to Reuters, Hastings name-dropped the UK's postal service: "it's streaming only. That's a big difference - no warehouses, no integration with the Royal Mail".

Back in 2005 Netflix dropped its plans for the UK market to fight off competition in the States. This time, insists Hastings, Netflix will be successful.

"We are focused on entering one country and seeing how we do" he said.

Love Competition

Netflix will face a tough competitor from UK DVD rental behemoth Lovefilm who already run their own online movie streaming service in the UK.

Lovefilm currently offer around 3000 movies for streaming, around 10% of which are available completely free.

The move might also be one of many wakeup calls to the UK's broadband market. Users with an internet connection that isn't up to speed or on a broadband package with a small monthly data allowance are likely to have problems accessing online streaming services.

The advent of faster broadband in the UK will take time but plans are progressing. For example, BT recently launched a new fibre-optic broadband service - BT Infinity broadband - which is capable of up to 40Mb/s speeds.

In order to avoid flopping once again, one possibility for Netflix would be to arrange a tie-in service with broadband providers, ensuring that less technically aware users can always access their movies.

Direct to TV

Other new technologies will no doubt dominate the battle for subscribers.

Games consoles and the latest HDTV's incorporate hardware and software allowing them to connect directly to online movie streams such as those offered by Netflix and Lovefilm.

Netflix subscribers in the US are able to stream movies via Xbox360, PS3 or Wii as well as through some of the latest Blu-ray players.

Sony and Samsung recently announced a tie-in with Lovefilm at CES2010 in Las Vegas, a move which means users can stream Lovefilm movies direct to their TVs and manage their DVD subscription form the armchair.

Sony's new range of TVs also utilise the same menu system as the PS3 indicating a likely move of the Lovefilm service onto the popular console.

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