Lovefilm boosted by 'staying-in' trend

Online DVD rental site Lovefilm said today it expects to see a 70% rise in its customer base this year as cash-strapped consumers choose to stay in.

The forecast was also attributed to expansion of the business following the acquisition of Amazon’s UK and German DVD rental business in April.

Lovefilm, which operates in Sweden, Norway, Denmark, Germany and the UK, saw annual revenues of £49m (€62m) last year – a year-on-year increase of 38%.

Between the start of the credit crunch in August 2007 and early October the group said it had seen a 40% increase in membership numbers, which now stand at just under one million.

Chief executive Simon Calver attributed the improvement to the “staying-in trend”.

“The business is consistently demonstrating its strength in the recessionary environment because people are spending more time at home,” he added.

Lovefilm, which is about to file its accounts for 2007, said it was generating profits for the first time during 2008 and hoped to see revenues increase to £100m (€127m) in 2009.

The group faces competition from the Blockbuster online rental service and similar smaller operations, as well as the more traditional high street businesses and subscription film channels like Sky Movies.

Lovefilm acquired Amazon’s UK and German DVD rental operations for £61m (€77m). As part of the deal, Amazon Europe made a cash investment in Lovefilm and became its largest shareholder.